BUSINESS

Labor subsidy till mid-October

ROULA SALOUROU

TAGS: Finance

The state intends to finance Greek enterprises to the tune of at least 820 million euros from national and European resources, to support employment in sectors proven to have been harmed by the coronavirus pandemic.

The law amendment on the “Syn-Ergasia” mechanism was tabled on Friday in Parliament and will be immediately voted into law so that it can apply from June 15 to October 15. Employers will be able to reduce their employees’ weekly hours by up to 50%, with the state covering 60% of salary losses. From the start of the measure’s application, employers will no longer be able to suspend employees or have them work for less than 50% of their regular work hours as that would serve as a counterincentive for the application of the new mechanism.

The employers that join the Syn-Ergasia system will be able to halve the weekly working hours either for all of their staff or for some employees, depending on their operational requirements. The reduction of the weekly working hours does not entail any changes to the labor contract of workers included in the mechanism for the period when employers use the measure. The mechanism only applies to workers with a full-time salary contract and employers may use it for as long as they deem necessary, from one to four months. However, the social security contributions will be covered by the employers, and calculated on the workers’ nominal salaries.

If the monthly pay due is below the minimum salary, the state will have to cover the difference so that each worker eventually receives €550 net per month. The state also has to pay the proportionate amount of the holiday and Christmas bonuses that will be calculated on the state support and not on the regular salary. However, it is not clear whether the employer’s share of these bonuses will be calculated on the half-salary to be paid over these months.

Crucially, the enterprises that enter the mechanism will not be allowed to lay off any staff covered by it, and must retain their nominal salaries during the mechanism’s application.

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