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Coronavirus and Employment: How will the new salary subsidy mechanism work?

Salary subsidy 60% for employees with full-time contracts who will have reduced working hours from June 1 until 30 September, and as 100% for their low paid 650 euro,…….. includes the government's third package of measures to support employment in the "post-colonial era", which began with the gradual lifting of restrictive measures and the opening up of the economy.

The aid will be activated as soon as a company reduces its time (hours) work as well 50% for part or all of the employees employed under full-time contracts.

The amount of aid will cover it 60% wage loss due to the reduced working hours that an employee will have, while it is ensured that the low wages are paid with their minimum wage 650 euros will have full coverage of salary loss and will not fall below them 650 euros due to reduced working hours.

To those who are paid, that is, with the minimum wage the subsidy will reach 100% and they will not fall under them 650 euros even if they work 4 hours instead of 8 hours. According to data from the "Ergani" platform, with their minimum wage 650 euros are paid approximately 500.000 employees, who, with the subsidy announced yesterday, they will have no pay cut even if they work less than 8 hours.

In cases where the fees are above 650 euro, the subsidy will cover it 60% of wage losses with thresholds 650 euro.

For example, full-time employee with salary 1.100 euros that will have a reduction in working hours for one month, and will have to get half the salary, namely 550 euro, will be subsidized against 60% for the loss of the remaining salary and will receive aid 330 euro (550 x 60% = 330). His salary for the one month he will work part-time will not bej 550 euros but 880 euro, and due to the subsidy the loss of salary will be limited to 20% (880 / 1.100 = 0,20).

The subsidy will cost about 1 billion. euro, and if necessary, the measure will be extended beyond September.

During its implementation, employers are prohibited from dismissing and are prohibited from converting full-time to part-time employment contracts..

The subsidy will not apply to those already in part-time employment, (since employers already pay half the salary), while it remains to be seen whether the opposite will be allowed, that is, conversion from part-time to full-time employment with subsequent salary subsidy due to reduced working hours.

The measures for the support of the work were presented yesterday by the Minister of Labor, Giannis Vroutsis, which are part of the new mechanism, with the name "SYN-ERGASIA", which will operate with national resources, which will then be replaced by activating the European SURE program.

The salary subsidy and employment protection mechanism will operate as follows:

  • The mechanism will also include companies operating for the first time and have not recorded revenue in recent months..
  • The mechanism will cover all existing full-time employees.
  • The mechanism will also apply to seasonal companies. All full-time employees will be eligible to participate, up to the number of full-time employees held in the same month last year.
  • It will not be allowed to change the employment relationship from part-time to full-time in order for the company to receive the benefit of participating in the mechanism..
  • The employer's right to reduce the working time of the full-time employee up to 50%, will be exercised under the strict condition that the type of employment relationship will not change.
  • The state undertakes the obligation to replace 60% of the employee's income for the time the employee will not be working.
  • In case the net salary after the above adjustment falls short of the minimum wage (SS.: 650 euro), the difference will be fully covered by the state.
  • The employer has the obligation to cover all the employee's insurance contributions, calculated on the original nominal salary.
  • As long as the employee is on reduced employment, the employer is prohibited from terminating the employment contract and reducing the employee's nominal salary.

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