BREAKING: Czech state to cover 80% of employee wages for businesses closed by quarantine

The Czech Republic will pay full compensation to businesses for the wages of employees in quarantine, as well as cover 80% of the wages of those working in the shops, restaurants and other businesses that remain closed under the coronavirus quarantine measures, the Czech cabinet has decided today.

The new measures were announced at a government press conference this evening.

Previously, employers were on the hook for 60% of employee salaries for those in quarantine over the coronavirus. Under the new measures, the state will pay 100% of the salary for anyone in quarantine.

Also, businesses currently shuttered by the quarantine measures – restaurants, shops, and other facilities specifically closed under the regulations – are currently on the hook for 100% of the salary of their employees. Many of those employees are being laid off as a result.

Under the new measures, those employers will only need to cover 20% of employee salaries, with the Czech state picking up the rest of the paycheck.

The goal is to soften the coronavirus quarantine’s impact on firms and institutions and prevent the dismissal of staff as redundant, Labor and Social Affairs Minister Jana Maláčová told journalists after the cabinet meeting.

The new measures represent the first two of five parts of the Ministry of Labor and Social Affairs’ “Antivirus” measures intended to aid workers and business during the coronavirus quarantine measures.

“The government approved the first points of our #Antivirus program,” tweeted Maláčová.

“People must not fall into another hopelessness by losing their jobs! And with this antibody, employers can better handle the current crisis and will not have to lay anyone off.”

In addition to these first two measures, Maláčová also Tweeted a helpful infographic that includes the next steps the Czech government is working on.

Those include businesses not specifically closed but otherwise affected by the quarantine measures, as well as self-employed persons.

Next up for the cabinet to discuss: businesses that have not been specifically targeted by the quarantine measures, but which have had to close anyway. Those businesses include ones that have had reduced access to necessary materials because of the quarantine measures, and businesses that have seen reduced demand from the measures, which are currently paying employees 80% and 60% of their salary, respectively, with no governmental aid.

Under the next steps of the Ministry of Labor and Social Affairs’ Antivirus measures, which will be discussed in the coming days, the Czech state would cover half of the salary of employees working for business in these situations.

The final measure of the Ministry of Labor and Social Affairs’ Antivirus plan would cover self-employed persons. The current proposal would be to suspend social insurance payments for these persons, as well as make available benefits on a case-by-case basis for those who have been particularly affected.

Under a separate measure discussed at tonight’s press conference, the Czech state will also pay nursing benefits to any self-employed persons with children up to 13 years of age. The benefits will amount to 424 crowns per day, or approximately CZK 14,000 per month.

Trade unions and employers previously supported the plan.

Employers pay 60 percent of the base wage to quarantined employees. The costs should be reimbursed to them by the Labour Office.

A total of 24,000 people are in quarantine in the country now, Malacova said.

The employees of the shops, restaurants and other facilities closed over the epidemic should receive their full average wage, of which the state should cover 80 percent for ten days, which is the period for which the shops and facilities must remain closed from March 14 to March 24.

The two measures are to apply to about 100,000 people altogether and require the costs of 1.1 billion crowns, Malacova said, stressing that the sum would serve to protect jobs.

Apart from the two measures, the Labour Ministry also proposed that the state largely cover the wages of those who are barred from working because at least 30 percent of their colleagues ended in quarantine or sickness leave, and those afflicted by a decline in production or service as a result of the declining market demand.

The cabinet did not approve these proposals today, however.

If an employee is barred from working because at least 30 percent of their colleagues ended in quarantine or sickness leave, they should receive their average wage, of which the state should cover four fifths.

In case of a production or service decline due to the declining demand, employees should receive at least 60 percent of their pay, with the state covering a half of the sum for three months, the ministry wrote.

In a document accompanying its proposals, the ministry wrote that the pandemic plan of the Czech Republic reckons with the GDP falling by 1.5-3.0 percent, which corresponds to up to 180 billion crowns, during the expected 90 days of the pandemic.

According to the ministry, the compensations would go for the wages of 10,000 quarantined people at the most and 75,000 workers of closed shops at the most.

The trade unions, however, estimated the expected three-month coronavirus crisis to cause the GDP fall by 5 to 8 percent and the abolition of up to 450,000 jobs.