Transitioning from Short Term Work Allowance to Cash Wage Support

As part of the economic measures taken against Covid-19, the short term work allowance and the new temporary arrangement of unpaid leave have helped employers with their cash flow management in the short run.  It is possible to shift from unpaid leave to short term work and from short term work to cash wage support. What process should employers follow?

Let’s first take a quick look at the short term work allowance and  the cash wage support practices.

Short Term Work Allowance: The allowance is covered by the unemployment insurance fund, therefore,  applies to employees covered by unemployment insurance. Due to the pandemic, the conditions to qualify for the allowance were stretched in favor of the employees: In order to benefit from the short term work allowance, it is sufficient to have 60 days of service contract and 450 premium days in the last 3 years. Employees who receive a pension cannot benefit from a short term work allowance.

Short term work allowance is deducted from the unemployment benefit entitlement duration of the employees.

Cash Wage Support: With the law no 7244 dated April 17, 2020, a cash wage support of 39.24 TL was provided for those who were released for unpaid leave and whose jobs were terminated.

As of April 17, 2020, employees who have been granted unpaid leave by the employer and who cannot benefit from short term work allowance can benefit from this cash support. In addition, those who have been terminated after March 15, 2020 have also been covered by this wage support. Here, as in the short term work allowance, those who receive old-age pension cannot benefit from the cash wage support.

The employer has the right to choose between short term work allowance and unpaid leave support payments. However, if the worker fulfills all the conditions for both, giving priority to the short term work allowance is in favor of the worker.

How to Transition from Short Term Work Allowance to Cash Wage Support?

The employer can apply for cash wage support for workers who do not meet short-term work allowance criteria. As stated in our article, short term work allowance is deducted from the unemployment benefit period of the employees, and employers can apply for cash wage support from the expiry date of the short term work allowance onwards.

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