Employer must pay more when laying off employees.

New rules regarding employer's obligation to pay salary during lay-offs was effective from 1 January 2014.

Global_business

Companies must now pay wages for the first 20 working days when employees are laid off (the employer period). This represents a doubling from 2013 where the employer period was 10 days.

The employer period occurs after the expiration of the notice period of 14 days and applies regardless of whether the lay-off is complete or partial. Consequently, the company is exempt from the duty to pay salary 34 days after the notice is given. It is also introduced a further restriction of the number of weeks a person can receive unemployment benefits during the lay-off - from 30 weeks to 26 weeks. After this period, the employer's obligation to pay wages re-occurs.

It is believed that the amended lay-off rules will mean that fewer companies will choose lay-offs. This is in line with the government's purpose. The consequence may be an increase in the number of redundancies.