Finance Minister Ardwell Irion said employees of companies applying for payroll support will have to contribute 20 per cent of their salaries (see Thursday paper). The Council of Ministers approved the change before sending it on to the Committee for Financial Supervision (CFT) and executing agency Social and Health Insurances SZV.
No timeline was mentioned, but if the target is July 1 this must be implemented before the end-of-month payrolls are processed. Although not completely unexpected, it would nevertheless amount to a de-facto retroactive wage reduction, but that appears to be the “new reality” in which St. Maarten strongly depends on COVID-19 liquidity loans from the Netherlands to prevent widespread business closures and mass layoffs.
Employers having to explain this to their staff, especially if these already made some sacrifices in terms of income and/or working hours, are not to be envied. For many there is no choice, however, having lost at least 20 per cent of their May turnover compared to the same month last year and in most cases considerably more.
The next round of wage subsidy officially still for June could also be the last, unless agreement can be reached on new conditions set by the Dutch government for a third tranche of assistance to cover the July through September period. This makes it crucial for those who qualify to make use of the option.
To allow the latter a pending 29 million Netherlands Antillean guilders from the second tranche is needed. It probably will be released now that other requirements such as a 12.5 per cent cut in the total benefits package of civil servants by halving their vacation allowance, plus one of 25 per cent in that of political and public office holders have been met, while increases of the pensionable age to 65 for both the old age AOV and public sector APS pensions were approved by Parliament.
These are extremely difficult times for everyone, when the island’s social partners need to stick together to seek joint, be it unavoidably painful ways to make the best of a bad situation.