Catalogue of International Initiatives to Support Workers through COVID-19

The Australian government is still delaying needed measures to support workers in casual, self-employed, or gig positions during the unprecedented labour market turmoil resulting from the COVID-19 pandemic. Other countries, however, are moving quickly with unprecedented measures to support jobs and incomes for all workers - including those in non-standard employment - to ensure they can take necessary time away from work, and do not lose their livelihoods as a result of the virus. We have assembled a catalogue of international initiatives aimed at achieving these dual outcomes.


Update: On 30 March, the Australian government announced a massive $130 billion wage subsidy program, to catch up with similar schemes that have been implemented in other countries (described in detail below). This is a welcome development, attributable largely to the advocacy of the ACTU and its affiliated unions. However, there are several weaknesses in the design of the scheme – most acutely, the fact that it excludes over 2 million short-tenure casual workers and foreign visa workers. Watch this site for a more detailed analysis of the pro’s and con’s of the government’s package. And we will continue to update the catalogue below with relevant developments from other countries as the world continues to respond to the COVID-19 pandemic.


 

Catalogue of International COVID-19 Labour Market Responses

Australia Germany Netherlands Spain
Canada Hong Kong New Zealand Sweden
Denmark Ireland Norway UK
France Italy South Korea USA

The COVID-19 pandemic poses unprecedented risks to economies and societies around the world: both health risks and economic risks. Because of the urgent medical advice to social distance, and isolate people who may have been infected by or exposed to the virus, normal working patterns are being disrupted for tens of millions of workers. And with so many people unable to work and produce, GDP and incomes are collapsing around us in real time.

Most governments are recognising the incredible urgency of this situation and moving quickly to provide emergency supports for workers, households, and the economy. A top priority in this regard must be aligning social and labour policy with medical directions to isolate infected and potentially infected workers. In this task, we suddenly confront the painful reality of the modern precarious labour market – which has outdated many of our traditional income support and insurance protections.

Our research indicates that in Australia today less than half of all employed people hold a ‘standard’ permanent full-time waged job with normal entitlements. All others experience one or more dimensions of precarity: part-time hours, temporary or casual status, or various forms of self-employment (most of which are very insecure). Casual and self-employed workers receive no sick pay; many part-time workers do not have effective protection (since their hours are often irregular); and even permanent full-time workers may have already used some or all of their entitlement. With sick pay thus unavailable for a large and growing share of the workforce, there is great risk that individuals will be forced to choose between earning money to buy food and pay rent, and heeding the public health advice to isolate themselves as needed.

Apart from increasing Newstart and waiving a waiting period for Newstart sickness benefits, the Australian government has provided no support for the one million casual workers of less than 12 months job tenure who do not qualify for normal paid sick leave or the new JobKeeper allowance. A further one million migrant workers are ineligible for either JobKeeper or social security payments.

The Attorney-General even suggested that casual workers have somehow already “made provisions” for income disruptions by setting aside funds for an emergency such as this one. And leading business lobbyists have claimed that casual workers already in fact receive sick pay (via their supposedly higher hourly wages). These responses are far-fetched and dangerous. Ignoring the financial stress of casual and migrant workers in this moment enhances the risk that they may continue to perform their jobs when they should be at home, risking further spread of the virus to colleagues and customers.

Countries around the world are taking extraordinary steps to protect workers, support incomes, and ensure that benefits are provided to the large numbers of non-standard workers who now constitute such a large part of the labour market. To inform the continuing policy debate in Australia, we have gathered summary information (and links for further information) on just some of these measures from other countries. So we can keep this catalogue up to date, please forward further suggestions and links to futurework@tai.org.au. Here we focus on measures affecting job and income security for workers and working-class households, rather than other measures (such as loan guarantees and liquidity measures implemented by governments and central banks) also aimed at offsetting the devastating impact of the pandemic on world economies.

Canada

The Canadian federal government will pay a 75% direct wage subsidy to businesses and non-profit employers of any size, for workers who will be kept on the payroll (whether actively working or not). The subsidy applies to wages up to $58,700 per year (125% of median wages) is capped, providing a maximum weekly subsidy of $847. The government earlier announced a new income support program for workers affected by the pandemic: the Canadian Emergency Response Benefit will pay up to 4 months of benefit at $2000 per month to any workers (permanent, temporary and casual, self-employed, or gig workers) required to self-isolate, care for someone who is ill, care for children while schools re closed, or who lose their jobs for economic reasons during the pandemic but do not qualify for normal Employment Insurance. The program will replace traditional Employment Insurance for those who are not currently receiving EI benefits; the EI system became overwhelmed by applications, leading the government to move to this alternative system (which will be delivered through the income tax administration, including on-line processing ability). The government is also boosting payments for GST credits and child benefits, deferring student loan repayments, and deferring income tax filing by 4 months.

Denmark

Denmark’s strong centralised tripartite industrial relations system has allowed that country to quickly implement a novel and powerful response to the labour market effects of the pandemic. The program was reached through agreement between the government, unions, and employer associations... perhaps like a “COVID-19 Accord,” to use an Australian analogy. For up to 3 months, the government will cover up to 75% of the wage costs of salaried workers, and 90% for hourly employees, up to 26,000 kroner ($6500A) per month. It applies to any company that otherwise would make redundant 30% or more of its staff, or at least 50 people. Some casual and contract workers are covered, but not self-employed. Employers cover the other 25% of wages; workers agree to use 5 days of annual leave during the subsidised period. The budget for the plan estimates that 2.5% of private sector workers will be covered by it, but there is no ceiling on the number.

France

The government has announced many far-reaching measures, including paying French workers temporarily laid off by their employers due to the coronavirus crisis a “partial unemployment benefit” equal to 84% of their wages, and employers are obliged to keep their jobs open for them.

Additionally, France has announced a moratorium on household mortgage, utility, rent and credit card payments, and an open-ended pledge that no company will be allowed to go bankrupt during the crisis. Social security contributions by workers and employers are reduced by €35 billion. Unemployment benefits are now available to people whose hours have been cut (but are still working part-time), costing another €8.5 billion. A special “solidarity fund” will pay benefits to self-employed workers and shop-keepers. The government has indicated it is prepared to nationalise major companies facing potential bankruptcy during the downturn, to keep them in business and protect jobs.

Germany

Europe’s industrial heartland also pledged unlimited financial support to prevent any company from going bankrupt during the crisis. Employers will pay full salary during the first 6 weeks of absence from work, compensated by government; after that, compensation is paid according to existing sick pay schedules. Government compensation will also be paid directly to self-employed and freelancers based on their declared income in the previous year. Under Germany's powerful short-time working allowance, hours are reduced, and employers pay for time actually worked at normal rates; the government then tops up the total income to 60% of after-tax levels (67% for workers who are parents). This allows companies to maintain full staff complements, even while reducing hours to offset a downturn in business activity.

Hong Kong

A cash subsidy of $10,000HK (about $2200A) is paid to every adult resident. People in public housing (which makes up most of Hong Kong’s residences) receive one month of free rent. One extra month of old age and disability benefits is paid. Home buyers, students, and small businesses also received support, in an overall aid package worth over 4% of GDP.

Ireland

The government will directly pay 70% of wages for workers who would otherwise be made redundant, at any business experiencing a revenue decline of 25% or more. The scheme replaces wages up to €410 per week. The government also reformed sick pay, illness benefits, and supplementary unemployment benefits to cover all workers (including self-employed) for the length of the health crisis, so that workers of any status can follow medical advice to self-isolate or care for others. A new Pandemic Unemployment Support Payment is made available to all workers (including self-employed) who lose all work due to the crisis (whether for their own health reasons, or economic impacts). Up to €350 per week will be paid for up to 12 weeks; there is a simple 1-page form to apply, and no waiting period. The former 6-day waiting period for Illness Benefits is waived, and the maximum benefit is raised to €305 per week for 2 weeks. Short-time Work Support can be paid (for up to 234 days) to workers whose hours have been reduced (to 3 days per week or less), paying up to €81.20 per day not worked.

Italy

Hard-hit Italy has introduced far-reaching measures based on tripartite agreements between the government, unions, and industrialists, to reduce job loss and support wages. Sick leave is paid to any workers who lose work because of illness, or closure of their workplace due to health concerns (the first 3 days covered by the employer, and then after that by the government). €1000 per month will be provided to any workers who lose their jobs because of the crisis; there is also a €500 per month payment to self-employed workers and freelancers. Mortgage payments have been suspended. The government, unions and employers have also negotiated special safety measures for workers, to maintain production and distribution of essential supplies.

Netherlands

The government will pay wages for workers at businesses which experience falling revenues as a result of the pandemic. The proportion of wages covered varies with the intensity of firms' revenue losses. Maximum wage payment is 90% of pre-pandemic wage levels. The program replaces the previous short-time work plan, and will last for 3 months (with a 3-month extension if needed). Benefits are retroactive to 1 March. Firms will immediately receive 80% of their estimated compensation upon application; adjustments (as needed) will be made after inspection of submitted documentation. The program also applies to freelance workers.

New Zealand

The government support package is worth over $12 billion (NZ), or 4% of New Zealand’s GDP. Close to half the value is for immediate wage subsidies for businesses to prevent redundancies: $585(NZ) per week per full-time worker, for up to 12 weeks. Similar weekly benefits ($585/week for full-time workers, $350 for part-time) will be paid for anyone (including contractors and self-employed) forced into self-isolation or to care for others, for up to 8 weeks. $3 billion is for additional targeted aid for lower-income households, including seniors, and a permanent increase in an energy subsidy. Close to $500 million is allocated to supporting immediate health responses.

Norway

The government removed the three-day waiting period for unemployment benefits; it also committed to continue paying salaries of workers who would otherwise face short-term redundancies. Companies can defer forwarding payroll tax to the government, to supplement cash flow during the downturn. The government is also offering 100 billion krone (over 10% of GDP) in loans and guarantees for business lending and bond issues (split half-and-half between smaller and large companies).

South Korea

In South Korea, when employers cease operations and make workers redundant, they are legally required to make redundancy payments equal to at least 70% of workers' previous wages. But with the scale of shutdowns happening now, the government will step in to make those payments instead: covering 70% of wages up to ₩130,000 ($A185) per day. Applications for the subsidy have been being accepted since 17 February. The program can also be utilised to subsidise paid leave for workers in the event of temporary stand-downs: again, the government pays the first ₩130,000 ($A185) per day, and the employer pays the remainder.

Spain

Jobless benefits were increased (including for workers who would not normally qualify) , as part of a €200 billion package, equal to 20% of GDP  (half of that is loan guarantees for private firms). Workers are granted full pay while self-isolating or caring for family members. The government also announced a one-month moratorium on mortgage payments and utility bill payments (potentially extendable).

Sweden

A 300 billion kroner support package (worth about 6% of GDP) contains numerous measures to stabilise employment and incomes. The former one-day waiting period before qualifying for sick pay has been eliminated, and the central government will cover the full costs of all sick leave (normally paid by employers) during April and May. Self-employed persons and contractors will also be covered for 14 days of sick pay, also paid by the government. A subsidy for work-sharing and covering the costs of short-term layoffs has been significantly increased: the central government will cover 75% of wage costs when hours are reduced, in order to maintain workers’ total income at 90% of initial levels. Companies can defer payment to government of social security payments, deducted income tax (from workers), and collected GST for up to 3 months, to supplement their cash flow through the crisis. The central bank is directly lending up to another 500 billion kroner (over 10% of GDP) to companies to maintain operations and viability.

UK

In addition to a large program of loan guarantees for businesses (worth some ₤300 billion), the UK government has announced ₤20 billion in direct aid to workers and households affected by workplace disruptions. Specific measures include deferred social security charges, and two months of direct state payments to workers who lose work because of shutdowns. Mandatory sick pay is provided for workers who must self-isolate or care for others, backed by sick pay subsidies to smaller employers. On March 20 the government announced a huge wage support program: it will directly pay the wages (up to ₤2500 per month, just above median income) for workers placed on furlough by employers of any size, in order to keep them on the firms' payroll. The plan will initially last for 3 months (retroactive to 1 March), and there is no cap on the overall cost of the program. Self-employed workers receive a different stream of benefits: deferral of all tax assessments until January 2021, to be offset by credits equivalent to statutory sick pay received by waged workers.

USA

The total package of supports passed 24 March by the US Congress is worth $2 trillion (US), or over 8% of US GDP. That includes $200 billion in secured loans to hard-hit businesses (including airlines). The package direct payments of $1200 to each adult with previous income up to $75,000; and smaller payments for those previously earning between $75000 and $99000. Families also receive payments of $500 per child. The federal government will also make special payments to unemployed workers of up to $600 per week - more than doubling the level of unemployment insurance paid by state governments. And a new federal-funded Pandemic Unemployment assistance Program will pay similar benefits to state unemployment benefits for self-employed contractors, gig workers, and others who wouldn't normally qualify for state UI. Any employer with under 500 employees can receive loans to cover 6 weeks of their payroll costs (up to $1540 per worker), on condition there are no redundancies for at least 8 weeks after receiving the loan. Expanded eligibility to unemployment benefits is provided, backed up by federal aid to the state-run programs. Workers in firms with less than 500 employees are able to take up to 12 weeks of leave for self-isolation or caring for family members, receiving at least two-thirds of their normal pay (up to $200 per day, or $10,000 in total). Income tax filing is deferred by 90 days.


It is clear that governments around the world are responding to this unprecedented labour market crisis with the urgency and creativity it requires. Policy must be reformed quickly and creatively to address the imperatives of keeping workers healthy, and ensuring that the pandemic does not destroy the livelihoods of millions. It is time for Australia's government to embrace the same sense of determination.


ACNC_Registered_Charity_Logo

get updates