2021 Changes In Labour Law

• Published date: 02 August 2021
• Subject Matter: Employment and HR, Contract of Employment, Health & Safety, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: Cobalt Legal
• Author: Karina Paatsi and Heili Haabu

Reimbursement of labour costs to employers in Harjumaa and Ida-Virumaa counties significantly affected by restrictions to prevent the spread of COVID-19

The Unemployment Insurance Fund reimburses labour costs to employers in Harjumaa and Ida-Virumaa if their activities have been significantly disrupted between 28 December 2020 and 17 January 2021 due to the current extraordinary circumstances.

Salary subsidies will be paid to local companies, branches of foreign companies, non-profit associations, foundations or self-employed persons:

• entered in the Estonia commercial register or register of non-profit associations and foundations;
• for activities significantly disrupted between 28 December 2020 and 17 January 2021 by restrictions imposed to prevent the spread of COVID-19;
• whose designated principal activity is among the areas most affected by the restrictions (as specified in the relevant regulation), including accommodation, catering, sports and recreational training, and the performance arts;
• if their employees' place of work is in Harjumaa or Ida-Virumaa county as of 22 December 2020 according to the Employment Register;
• that did not owe national taxes as of 1 August 2020 or had either paid or deferred the tax debt by 22 December 2020.

Employers are also eligible for salary subsidies for employees with whom they had a valid employment relationship between 28 December 2020 and 17 January 2021. Subsidised employers are not allowed to dismiss employees to whom the subsidy was requested within 30 days of receiving the subsidy.

Employers receive salary subsidies in an amount equal to their salary costs on employees working in Harjumaa and Ida-Virumaa counties in November 2020; the subsidies are capped at ?180,000 per employer. The subsidised amounts are calculated based on payments subject to individually registered social tax declared to the Tax and Customs Board.

The subsidy for a self-employed person is ?584, which is the minimum wage for 2020 according to subsection 29 (5) of the Employment Contracts Act.

Applications for subsidies are accepted from 1 to 28 February 2021 through the Unemployment Insurance Fund e-service. According to the Unemployment Insurance Fund, payments will start by 14 February 2021. Subsidies will be transferred to the employer's bank account.

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