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New law on "Insurance from unemployment"

04 Jan 2018

A new Law on “Insurance from unemployment” (“the Law”) was adopted by the Parliament on June 30, 2017. According to Article 26 of the Law, it has become into force from January 01, 2018.  

Apart from introducing some novelties and new conditions on provision of unemployment allowances, the Law can be seen as a summary of already existing normative legal acts regulating unemployment insurance matters.  

According to the Law, it shall be applicable to employees whose labor relations are terminated as a result of staff lay out, liquidation of a legal entity or a state agency. 

Unlike, the previous legislation regulating unemployment issues, under the current Law both employees and employers will have to pay additional social insurance contributions, tariffs of which is 0.5% of the calculated payroll and 0.5% of the gross salary of each employee. In other words, employer and employee each will have to pay additional 0.5%, besides compulsory social contribution payments of 22% and 3%, respectively. 

Based on the Law the notion of “social insurance experience”, a criterion for consideration for an unemployment allowance, will encompass both the period during which compulsory social insurance contributions were paid to the benefit of employee, before the Law came into force, and the period during which social insurance payments are to be paid by employer, after the Law comes into force. 

Finally, pursuant to Article 10.3 of the Law the said social insurance payments must be calculated and fully transferred by the employer to the insuring state agency (i.e. SSPF) at the same time with the payment of monthly salaries but not later than 15th of a next month.