translated from Spanish: Pandemic hits labor market hard: Government reports that more than half a million workers have contracts suspended by the Employment Protection Act

A total of 66,500 companies have applied for the Employment Protection Act and requests for suspensions of contracts involve 516,000 workers across the country. These are the hard data provided by the Minister of Labor, María José Zaldívar, in a new balance of compliance with the regulations put in place to alleviate the work ravages that the current health emergency has caused.
The figures more than double the 23 thousand companies reported on April 17, in the executive’s first balance sheet on the law’s progress, and are almost double in relation to the 270 thousand that were reported in that instance. With regard to the companies that are eligible for this new regulation, the balance sheet indicates that 875 are large companies. “What we have pointed out as the Ministry of Labour is that companies that abid by this law, have to be companies that necessarily have to be in some situation that prevents them from covering with all their obligations in an ordinary way, therefore, any company that has not been affected in their income, should not benefit from this law” , the secretary of state said.
According to the data provided by the minister, In addition, 73.9% of those taken by the law are micro (49,202), 18.5% small (12,308), 3.4% median (2,271), 1.3% large (875), and 2.9% have not been identified (1,917).
The issue is that the volume of affected is higher in large enterprises, since the contractual suspension affects 151,568 workers, a figure that is higher than that of employees in the micro-business segment (141,670 people).
However, Zaldívar maintained that it is important to keep in mind that the size or activity of the company is not a discriminatory factor of whether or not to accept this new law, “if not we will have to go into determining whether the assumptions actually occur in each of the productive activities, since in each of the companies , we will have to do an analysis as to whether their income has actually been affected, whether they can meet their obligations, if, for example, a company that takes this measure has made reductions in the remuneration of its senior executives or has taken other measures that justify that it is opting for this determination with respect to its workers.”
In addition, it argued that there are mechanisms through which “these audits can be done”, mechanisms by which “we can make complaints” and mechanisms in which “we can sanction when there is abusive conduct”.
With regard to the work being done in the analysis of this data, he stated that “these backgrounds have been brought to the attention of a Joint Monitoring Commission that was done to the Employment Protection Act, a commission that we agreed in the framework of the agreement to be able to remove this law, in which we would meet to evaluate the measures that had been implemented , determined whether the measures were adjusted or needed to be made corrections and tracked for the measures that could be implemented.”
“Today we had our first meeting that featured both Parliamentarians from the Senate, the Chamber of Deputies of the Government and the opposition and it was a constructive meeting that allowed us to analyze the data and set goals for the next sessions,” Zaldívar said.
Cesantía insurance
“With applications for Cesantía Insurance, as I told you a week ago that requests for Cesany Insurance had increased by 17% compared to the same date of the previous month, the figure we handled today is that there is a 20.6% increase, from the same previous date,” she added. This month 11,8506 applications have been recorded, and so far this year registration amounts to 402,664, 2.70% more than in the first four months of 2019.
“This is an element and a fact that complicates us a lot, because usually, regardless of how many dismissal letters, the applications of the Cessation Insurance are not linear, because not all people who disassociate use the benefit of Cesantía Insurance,” he argued.
The labour homeer argued that this is a phenomenon that does not occur in many situations, since people usually “find work elsewhere or because the month of notice or compensation serves me to be funded during the first few months, which is not happening today”.
“We are having a significant increase in Cesanity Insurance and this means that these unlinked workers during the previous month have not found work quickly and that is another news that comes to us to worry,” the minister said.
 

Original source in Spanish