Pay subsidy reform to enter into force

Pay subsidy is a discretionary subsidy aimed at promoting the employment of unemployed jobseekers. As of 1 July 2023, the use of pay subsidy will mostly be reserved to promote the employment of those with reduced working capacity or to unemployed jobseekers who are otherwise disadvantaged. The amount of pay subsidy granted due to the lack of professional skills will amount to 50% of labour costs. Subsidy granted for persons with reduced working capacity will amount to 70% of labour costs. The subsidy will no longer cover non-wage labour costs or holiday bonuses payable by the employer. The pay subsidy will usually be granted for five or ten months depending on the duration of the unemployment preceding the pay subsidy period.

As part of the reform, a new employment subsidy for those aged 55 or over will be introduced. The subsidy will be granted without consideration of expediency, as long as the conditions laid down in the Act are met. It will be paid for up to 70% of the eligible labour costs for a maximum period of ten months.

All employers, except for central government agencies, are eligible for pay subsidy but there are some criteria for granting the subsidy. The employer must apply for the pay subsidy before the employment relationship starts and the subsidy must be applied from the Employment and Economic Development Office.