COVID-19: Country Law & Regulatory Updates (Updated 05/12)

The COVID-19 pandemic significantly altered business operations across the globe. With unprecedented levels of economic disruption, governments in virtually all countries implemented mitigation measures, dispersed economic relief packages, and rushed to ensure businesses remain protected from the worst of the virus’s economic impact.

Get the essential information regarding employment contracts, paid leave, furloughs, and other considerations you need to know to keep your global business moving forward.

COVID-19: Country Regulation Updates

United Kingdom
On March 26, the United Kingdom released regulations for its lockdown, noting the limited circumstances in which people may leave their homes. While there is no mandatory work-from-home order, anyone able to work remotely is encouraged to do so.

Considerations for Businesses

Pay & Time Off
Employee salary reductions, whether temporary or permanent, are only permitted if the employee agrees in writing. Salary reductions do not require working hour reductions but must remain above the National Minimum Wage and National Living Wage. Any reductions in salary or working hours without a written contract or government-declared emergency is a breach of contract. Employers may implement furlough periods, though they must give a minimum three-week notice period prior to alternating furloughed employees. Businesses may also begin mandatory paid vacations with sufficient notice.

Suspension & Termination
Employee refusal of either salary or working hours reduction may result in termination and re-engagement. However, employers must first terminate the existing employment contract and offer a new contract with updated terms, resulting in a fair dismissal if the employee refuses these terms. Employees may be laid off without pay only if their contract includes this provision. There is no maximum timeframe for employee layoffs or reduced working hours. Dismissal of 20 or more employees within 90 days requires a collective consultation.

Government Subsidies & Aid
The UK’s Coronavirus Job Retention Scheme offers temporary assistance to all UK employers for a minimum of three months, effective March 1, 2020. Employers may claim 80% of furloughed employees’ gross monthly wage costs, up to £2,500 per month. They may also claim Employer National Insurance Contributions and minimum automatic enrollment employer pension contributions per the employee’s wage. All UK employers who by March 19, 2020, created and began a PAYE payroll scheme may claim through the UK government’s portal.

India
India implemented a mandatory nationwide lockdown on March 25, 2020, which remains in place until at least May 19, 2020.

Considerations for Businesses

Pay & Time Off
India’s Union Territories Chief Secretaries direct both public and private employers not to terminate employees and workers or reduce wages. Any employee or worker on leave must be deemed on duty and incur no consequential wage reductions during this time. Employees or workers diagnosed with COVID-19 who are unable to perform their duties will remain technically on duty.

Suspension & Termination
Employers may not terminate employees during the nationwide lockdown, per India’s government. Similarly, employers may not place employees on unpaid leave.

Government Subsidies & Aid
At this time, there are no nationwide subsidies or aid packages from India’s government.

China
The epicenter of the COVID-19 outbreak saw some of the strictest government-mandated lockdown measures beginning in late January, some of which remain in effect while others recently loosened their lockdown mandate.

Considerations for Businesses

Pay & Time Off
Employers can reduce employee salaries, working hours, and/or introduce shift work only when in agreement with affected employee(s). A more drastic measure permits employers to suspend employees for a certain period of time. However, the employer must either allow employees to take paid annual leave outlined in the employment contract, place the employee on leave by adapting permitted rest days, or suspend its operations and employees. If employers suspend operations and employees, employers must pay contract-specified salaries during the first pay cycle, and pay at least the local minimum wage beyond the first pay cycle and a “living fee” to employees who did not work during this time.  

Suspension & Termination
Employers may not under any circumstances unilaterally place employees on unpaid leave. Unpaid leave is only available should an employee agree. This includes employees infected by, or suspected to be infected by, COVID-19, or in close contact with COVID-19 patients. Employees receiving treatment for COVID-19, or under mandatory quarantine, may either take annual leave and receive normal salary during this time, or solely receive their normal salary. Any employment contracts expired during mandated quarantine automatically extended to the end of the employee’s medical care period.

Government Subsidies & Aid
China’s central bank and local governments introduced forms of aid, but no nationwide aid package currently exists.

Mexico
Mexico remains under a nationwide lockdown until at least May 30.

Considerations for Businesses

Pay & Time Off
Employers and employees must mutually agree to any salary reductions that reduce working hours with reduced pay. The parties must outline rules for hourly reductions and highlight that any pay or hour reductions are temporary with a specified end date. Hourly workers protected by collective bargaining agreements may receive similar reductions but they must be done through a union with the resulting agreement signed by the employer and union leader. Employers may not place employees on unpaid leave.

Suspension & Termination
Partial suspensions are permitted. To do so, employers must negotiate with individual employees to determine a reduction in work activities and a percentage of salary during the suspension period. Formal suspensions remain possible. However, employers must first submit a motion to the Labor Court requesting collective suspension of activities accompanied by sufficient evidence of financial hardship due to COVID-19.

Government Subsidies & Aid
At this time, there is no nationwide financial aid from the Mexican government, though limited sectors will receive government assistance.

Canada
The majority of Canada’s provinces are under some sort of stay-at-home order, with international travel restrictions in place.

Considerations for Businesses

Pay & Time Off
Province-specific employment contracts may include clauses specific to individual workers. Additionally, employers offering sick pay can allow employees to use these sick days. More drastically, employers can unilaterally implement temporary layoffs if employment agreements explicitly state an employer’s right to do so. If no provision is in place, layoffs may still occur, though only if employees agree in writing. Some organizations may qualify for workshare programs.

Canadian employers have other options and are encouraged to contact Velocity Global to discuss these options at length.

Suspension & Termination
Employers may not impose unpaid leave outside of those entitled by statute. Unilateral reductions and layoffs are options. Temporary layoffs remain aligned with country-wide employment standards, without terminating employees. Employees do not receive pay during temporary layoffs. However, employees must consent to either unpaid leave or a temporary layoff in either case. Employers considering layoffs are obliged to carefully consult employment agreements before taking such measures.

Employers can learn more about provisions concerning temporary layoffs here.

Government Subsidies & Aid
The Canadian government offers assistance for employees without paid sick leave, in quarantine, or forced to remain at home in order to care for children, including waiving waiting periods to claim Employment Insurance benefits, among other waivers to expedite financial assistance. Employees terminated or on reduced hours due to COVID-19 who are ineligible for Employment Insurance are eligible for an Emergency Support Benefit offered through the Canada Revenue Agency, as well as the Employment Insurance Work Sharing program. Employers must confirm unpaid leave provisions in their respective provinces.

Singapore
Early in the COVID-19 outbreak, the WHO praised Singapore’s handling of the virus. The country is now under a one-month, nationwide lockdown.

Considerations for Businesses

Pay & Time Off
Employer-mandated unpaid leave remains unlikely. If this is the case, the employer must receive the employee’s consent. Employees returning from abroad must quarantine for 14 days upon arrival. During this time, employers must ensure employees have access to meals and necessities; if they do not, the employer must provide them. Paid hospitalization leave applies to these employees.

Government Subsidies & Aid
The Singaporean government will pay a flat $3,000 for all lower-income workers and the self-employed over 35 years of age who, in 2019, received Workfare payouts. An additional $145 million of aid paid by social services offices (SSO) and community centers assist the unemployed as well. Between May and September, an SSO-administered COVID-19 Support Grant will pay $800 per month to the unemployed while seeking employment or training.

Germany
Europe’s top economy enforced a nationwide lockdown on March 22, recently lifting some of its strictest restrictions and allowing small businesses to reopen.

Considerations for Businesses

Pay & Time Off
Employers may reduce employees’ salaries only after reaching a mutual agreement with individual employees, the terms of which—reduction of working hours, temporary or permanent, or no reduction—remain open to negotiation. Employers likely cannot force unpaid leave but may enforce paid time off instead of accrued overtime hours. Furloughing employees presents problems as well; employers must consider employees’ vacation requests during this time. Employers may institute a “company holiday,” halting operations, though likely only for companies without a works council.

Suspension & Termination
Employees suspected of contracting the virus or deemed a “risk factor” must not enter the workplace and instead work from home, unless COVID-19-confirmed. In either case, the employee receives pay. COVID-confirmed employees receive full salary for six weeks, in line with statutory sick pay provisions.

Government Subsidies & Aid
Germany made unlimited loans available to employers in order to stave off mass layoffs. Both small and large businesses remain eligible.

Brazil
Without a nationwide lockdown, cities and local jurisdictions implemented their own restrictive gathering and shelter-in-place measures.

Considerations for Businesses

Pay & Time Off
On April 2nd, the Brazilian government introduced a decree permitting employer-directed wage reductions or suspended employment contracts. However, the Brazilian Supreme Court ruled this measure unconstitutional four days later, stating that salary reductions are only legal if reduction terms align with the decree’s rules. Labor unions must approve or deny proposed reductions within 10 days. Reductions come at 25%, 50%, or 70% with corresponding hourly reductions, among additional stipulations.

Sick employees receive up to 15 days paid sick leave and must inform the Social Security Institute (SSI) if not recovered after day 15 and, if unable to return to work, receives suspension and an SSI-paid sick leave until recovered.

Suspension & Termination
Employees with the ability to perform duties at home and physically able to do so may be required to work from home. If employees cannot work from home, paid leave may become necessary. Employees self-isolating based on reasonable concerns remain entitled to normal pay.

Government Subsidies & Aid
Brazil announced a $30 billion stimulus package that contains no new spending measures, but instead advances retirees’ December payments to May, allows a three-month deferral for SMEs, and expands cash assistance to Brazil’s poorest families.

Spain
One of the world’s hardest-hit countries in terms of cases and deaths, Spain will ease lockdown restrictions in two-week blocks until June 10, though some cities remain under complete lockdown. It recently allowed some businesses to reopen amid strict social distancing measures.

Considerations for Businesses

Pay & Time Off
Employers and individual employees must mutually agree before reducing salaries. If they reach no agreement, employers must substantially modify working conditions. If more than 10 employees’ conditions change, a consultation with the employee representative body may be needed. Similarly, employees cannot force unpaid leave onto employees; employers can, however, force employees to work from home and receive normal pay.

Suspension & Termination
In the event a large number of employees become infected, the employer must request the labor authorities’ permission to shut down its operations. Employees receive employment allowance during this time from Spain’s unemployment office, though employers must pay social security contributions. Employees refusing to come to work with no at-risk health conditions may be suspended from both work and pay in accordance with the collective bargaining agreements’ rules. Confirmed-infected employees receive sick leave allowance outlined in their employment contract or collective bargaining agreement.

Government Subsidies & Aid
Employers may temporarily suspend employment contracts and reduce working hours through expediente de regulación temporal de empleo (ERTE) provisions and applies in cases of mass employee infection or if employers prove disruptive economic, technical, production, or organization circumstances exist.

United Arab Emirates (UAE)
Dubai, the UAE’s largest city, remains under lockdown, though no nationwide lockdown yet exists.

Considerations for Businesses

Pay & Time Off
Employers may not reduce a non-Emirati national’s pay without mutual agreement, and permanent reductions must appear in a revised employment contract and then approved by and registered with the UAE’s Ministry of Human Resources and Emiratization or applicable freezone authority. Employers may dictate when employees must take annual leave in accordance with the national Labour Law.

Suspension & Termination
Employers may send employees home while paying normal salaries but cannot suspend either employment or contracts. However, unpaid leave during operations suspension applies only if the employee agrees. Sick employees are eligible for sick leave, though employees refusing to work without sound reason likely do not receive pay. Employers cannot make a non-Emirati employee redundant without first providing the employee’s details on the Virtual Labour Market, where other employers can access the employee’s details. Employers remain responsible for the housing of any employee made redundant so long as this provision is an employment benefit and all entitlements outside of wages until the employee finds work elsewhere or exits the UAE. However, it remains unclear whether employers must meet these terms if they pay severance above minimum statutory requirements.

Government Subsidies & Aid
Dubai and Abu Dhabi announced an AED 1.5 billion stimulus package to bolster liquidity, though no direct payments to businesses or individuals exist.

To learn more about how business operations in countries around the world have been impacted by the COVID-19 pandemic, our team of experts can advise you during this difficult time. Contact us today.

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