The Emergency Measures in the Public Interest (Covid-19) Bill, 2020 introduced has a temporary wage subsidy scheme to assist employers keep staff on their books for the duration of the crisis by paying a subsidy equal to up to 70% of an employee’s pay, up to a maximum of €410 per week.
KEY ELEMENTS OF THE SUBSIDY SCHEME
The draft text of the Emergency Measures in the Public Interest (Covid-19) Bill 2020 (the “Bill”) was published on 24th March 2020 and is being expedited through the legislative process.
Subject to the employee satisfying the eligibility requirements and the employer satisfying the qualifying conditions detailed below, the Subsidy Scheme will reimburse the following amounts:
|Salary Level||Subsidy Amount|
|Less than €38,000 gross pa||70% of employee’s take home pay up to maximum of €410 net per week|
|Between €38,000 and €76,000 gross pa||Maximum subsidy of €350 net per week|
|Over €76,000 gross pa||No subsidy available|
Pre conditions for eligibility for Employers
There are a number of pre-conditions that employers will need to satisfy before availing of the Subsidy Scheme including:
- Self-declare: the employer will be required to self-declare to the Revenue that its business has been adversely affected as a result of Covid-19;
- Demonstrate: the employer must be able to demonstrate (1) it has experienced at least 25% decline in turnover or customer orders (between 14 March 2020 and 30 June 2020); and (2) an inability to pay wages/outgoings;
- Payroll: the employer must continue to employ benefiting employees by keeping them on the payroll; and
- Top-up: the employer is required to use its “best efforts” to top up salaries. It is unclear to what extent an employer will be required to demonstrate such efforts.
Eligibility of Employees
Employees (at a certain salary level as detailed below) are eligible to avail of the Subsidy Scheme where:
- They were paid by their employer between 1 February 2020 – 15 March 2020;
- They were on their employer’s payroll on the snapshot date of 29 February 2020; and
- They remain on their employer’s payroll during the Subsidy Scheme period.
It is intended that the Subsidy Scheme will replace the current Covid-19 Refund Scheme and employees of private sector companies, whether carrying out their duties (as normal or on short-time) or not at all, will benefit from the Scheme – subject to the eligibility requirements set out above. However, any employees availing of other Covid-19 payments, such as the Covid-19 pandemic unemployment payment of €350 per week, cannot avail of the Subsidy Scheme.
Length of Scheme
Once available, it is currently intended that the Subsidy Scheme will run for 12 weeks, although this timeframe may be reviewed.
Penalties for abuse of the scheme
The Bill provides for penalties and interest for an abuse of the Subsidy Scheme or failure to pay the subsidy amount to in scope employees.
The Government’s efforts to introduce measures to lessen the impact of the Covid-19 pandemic on the economy through the introduction of the Subsidy Scheme and other uplifts to income support measures are welcome and essential. The scheme in theory could play a significant role in keeping people employed and maximising the State’s ability to hit the ground running post-pandemic. However, the scheme as drafted in my opinion will not achieve this and requires substantial amendment to achieve this goal
Sweeney McGann’s Employment and Commercial teams are providing practical advice to employers and business owners. If you would like to discuss the matter further please contact Aoife Hennessy or Gearoid McGann.