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05 June, 2020

The newly enacted Law 4690/2020 (Art.31) : Employment support mechanism

The newly enacted Law 4690/2020 (Art.31) : Employment support mechanism

An article by Constantine Alexiou (Partner) , Vicky Zarakioti (Associate). 

The newly enacted Law 4690/2020 (Art.31) establishes an employment support mechanism for the enterprises/employers of the private sector. The said mechanism, which shall be applicable for the period 15.06.2020 - 15.10.2020, is in the form of a short-term financial assistance by the State and aims to maintain the full-time employment in the private sector.

The main aspects of this newly enacted bill may be summarized as follows:

Α. The mechanism “SYN-ERGASIA”, incorporated in the bill, applies to all employers of the private sector (entities or natural persons), provided that their turnover has been decreased by at least 20% compared to the reference turnover, depending on the month on which the enterprises enter into the aforementioned mechanism and the type of tax records they keep.

Such employers may reduce the weekly working hours by up to 50%, either for part or for all of the fully-employed personnel, depending on the business’s operational needs. The respective wages shall be adjusted accordingly.

The State will finance 60% of the net wages of the said employees  for the relevant period, but not the social security contributions, which are borne by the employer. It should also be noted that the Christmas bonus and the annual leave wages payable in 2020 shall be adjusted accordingly.

Employers are not entitled to terminate the contracts under the “SYN-ERGASIA” mechanism and are obligated to maintain the nominal wages of their employees with reduced weekly employment for as long as each of them is employed at a reduced weekly schedule.

B. The right of employers to appoint the so-called “personnel for the safe operation of the enterprise” has now been revoked.

Finally, L. 4690/2020 enacts special provisions concerning employers and employees of the aviation, tourism and food sectors.



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