Factsheet for case EE-2020-10/325 – Updated – measures in Estonia
|Country||Estonia , applies nationwide|
|Time period||Temporary, 01 March 2020 – 31 May 2021|
|Type||Legislations or other statutory regulations|
Employment protection and retention
– Income support for people in employment (e.g. short-time work)
|Author||Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound|
|Case created||07 April 2020 (updated 06 August 2021)|
|Related ERM support instrument|
Due to the need to temporarily close down some companies and due to some companies losing a lot of clients, several companies have (temporarily) no income and thus paying wages is challenging or impossible. In order to avoid bankruptcies and a high share of unemployment, the Government decided to support the companies to pay wages to their employees. The measure was added to the Employment Programme 2017-2020 (programme through which additional active labour market measures are provided by the Unemployment Insurance Fund). It was discussed and approved by the Council of the Estonian Unemployment Insurance Fund and put into effect by a Government decree. The applications are accepted as of 6 April 2020 until the end of July 2020.
The subsidy is paid by the Estonian Unemployment Insurance Fund (EUIF) when the employer is in a situation where they comply with at least two of the following terms:
Subsidy is paid to employees who work on the basis of an employment contract and whose employers are not able to provide them with work or whose wages have been reduced. It must be applied for by the employer, but is paid directly to the employee.
The amount of the subsidy is 70% of the average monthly wage of the employee. The maximum amount of the subsidy is €1,000. The employment and social security taxes are also paid by the EUIF. The employer must pay additionally a wage of at least €150 to the employee (plus pay national taxes on the wage). The employee receives at least the national minimum wage (€584).
The subsidy is paid for up to two months for March, April or May 2020.
The subsidy provides dismissal protection. In case the employee is made redundant in the course of the same or the following calendar month they have received the temporary subsidy, the employer must return the subsidy.
Uptake by month:
33,508 employees of 6,705 companies received the subsidy in the total amount of €27.5 million
121,003 employees of 16,009 companies received the subsidy in the total amount of €113.2 million
91,010 employees of 10,482 companies received the subsidy in the total amount of €90.3 million
31,825 employees of 4,063 companies received the benefit in the total amount of €24.6 million
35,044 employees of 5,166 companies received the subsidy in the total amount of €27 million
36,508 employees of 5,350 companies received the subsidy in the total amount of €28.6 million
18,987 employees of 2,846 companies received the subsidy in the total amount of €15.6 million
According to the analysis by Praxis published in February 2021, the measure has prevented the potential rise in relative poverty as well as inequalities, e.g. the poverty rate would have increased by 4 percentage point without the measure. The effect was the highest among the age group 50-63 (Koppel, Laurimäe, 2021).
Employees in standard employment
||Does not apply to businesses||Does not apply to citizens|
Company / Companies
Public employment service
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Any other form of consultation, institutionalised (as stable working groups or committees) or informal||Any other form of consultation, institutionalised (as stable working groups or committees) or informal|
Social partners' role in the implementation, monitoring and assessment phase:
Social partners are directly related to the design of the temporary subsidy program via the Estonian Unemployment Insurance Fund (EUIF) council as being one of the council members. The council must agree with the measures offered by the EUIF, thus the social partners are strongly involved in the process.
The measure was discussed in and approved by the council of the Estonian Unemployment Insurance Fund. The council consists of the representatives of the government, companies, trade unions and employer's organisation. Though both social partners had their own specific views and needs, overall they were very supportive of the measure and the degree of debates was much lower than usually when negotiating measures.
Eurofound (2020), Temporary subsidy programme, case EE-2020-10/325 (measures in Estonia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.