Act on temporary payments to individuals due to loss of income from being quarantined without signs of being infected
- Employees who are quarantined will get paid a salary. In such cases where an employee is quarantined but does not have the right to a salary from their employer during the quarantine, the government shall pay the employee his salary.
- The goal of the new Act is to allow individuals to follow the commands of the public health authorities without worrying about loss of income.
- The bill only applies to the private employment market. As the bill only applies to employers, employees and independently employed individuals on the private employment market, it is estimated that it will apply to approximately 140,000 individuals, or a total of 75% of the total employment market.
- The aid is conditional. The bill states that certain conditions must be met, for instance the employer of the quarantined employee must be able to prove that he has paid the employee’s salary during the active period (1 February 2020 – 30 April 2020).
- There is a salary cap. The bill states that a cap will be put on government payments, the payments may not exceed 633.000 krona per employee, per calendar month.
Increased right to unemployment benefits for part-time employees
- The Minister of Social Affairs and Children has submitted another bill to Parliament regarding changes to the Act on Unemployment Insurance and the Act on Wage Guarantee Fund. The bill’s objective is to assist companies in maintaining their employees until the economic difficulties associated with COVID-19 dissolve. The proposed amendments of the bill are thus temporary.
- Companies experiencing temporary operating difficulties are encouraged to exercise the option to temporarily downgrade full-time employees to part-time employees rather than terminating the contract of employment. It is of great value to society that as many people as possible maintain their employment
- Should the bill be enacted into law it will carry the following changes:
- Individuals who are downgraded to part-time employment could have certain rights to unemployment benefits. These benefits would amount to the proportional loss of income of the employee after he was downgraded to part-time. The conditions of these benefits are that the employee’s employment rate must have been reduced by at least 20% and that the employee maintains at least a 50% employment rate.
- The amount of the unemployment benefits awarded to each person shall be calculated based on the limit of income-based unemployment benefits, ISK 456.404 in proportion with the employment rate decrease
- The total sum of the benefits, plus the salary maintained by an employee shall never exceed ISK 700.000 or 90% of the employee's average total salary for the last three months before the application for the benefits is filed.
- If self-employed individuals experience recession due to the COVID-19 outbreak they can apply for temporary suspension of their business operations with the Icelandic Tax Authority (form RSK 5.02) and subsequently apply for unemployment benefits. Self-employed individuals do not have to file for the termination of their business operations to apply for benefits as they used to before the new laws took effect.