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Supply Chain Innovation

Country-Specific Updates on Provisions for Workers in Response to the COVID-19 Pandemic

Friday, April 3, 2020

The World Health Organization declared the novel coronavirus (COVID-19), first reported in Wuhan, China, in December 2019, a global pandemic on March 11, 2020. The impact of the pandemic is unprecedented in modern history. Nations, businesses, and communities face public health, medical, economic, and political considerations as they end the spread of the virus. One essential consideration is the protection of factory and farm workers.

The Fair Labor Association Workplace Code of Conduct includes provisions on employment contracts, sick leave, protections for vulnerable workers, and factory closure and retrenchment designed to ensure that workers are treated fairly. The FLA is monitoring government announcements related to workers' rights during the global coronavirus pandemic, and will provide guidance as needed. Affiliated companies are expected to evaluate local laws against FLA standards and maintain the higher standard.

Updates are organized by region:

  • The Americas: Canada, Dominican Republic. El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru, United States
  • Europe, Middle East & Africa: Egypt, Ethiopia, Italy, Jordan, Portugal, South Africa, South Africa, Spain, Turkey
  • South Asia: Bangladesh, India, Pakistan, Sri Lanka
  • South East Asia: Cambodia, Malaysia, Myanmar, Philippines, Thailand, Vietnam

The Americas

Canada: On March 18, Canada’s prime minister announced the Emergency Care Benefit, as part of economic measures to help citizens throughout the pandemic. This benefit is for those that do not receive paid sick leave or have access to employment insurance and will provide up to $900 bi-weekly for up to 15 weeks. The measures did not include a national paid sick leave policy; however, workers are still able to take unpaid leave. There are also reports of employers adopting revised sick leave policies to reduce the spread of the virus. Provinces are beginning to restrict public gatherings and businesses; with some only allowing food and liquor stores, and pharmacies to remain open.

Dominican Republic: On March 19, the Chamber of Deputies approved a resolution submitted by the executive branch declaring the Dominican Republic in a state of emergency due to the coronavirus pandemic, which will be in effect for 25 days. The president ordered the suspension of all economic activities for 15 days, with exceptions, including manufacturing factories can remain operational so long as there are preventive and protection measures in the production areas and adjustments to the working schedule as needed. The Dominican government encouraged employers to take measures to isolate vulnerable workers (60 years and older, pregnant women, workers diagnosed with a chronic illness like diabetes, coronary heart diseases, among others) and recommended that workers should be compensated by the employer, even through an annual leave payment. Workers’ entitlement to medical leave for non-work related illnesses consists of a subsidy of 60 percent of their insured earnings in the last six months or 40 percent if the worker is hospitalized, starting from the fourth day the sick leave was issued and up to 26 weeks (Law 87-01 Dominica Republic Social Security regimen, article 131).

El Salvador: The legislative assembly on March 29 approved 15 additional days to the state of exception, which continues the suspension of freedom of movement and freedom of association. The new provisions will be in effect to April 13. According to the government regulations, employers must keep paying workers’ wages. However, private sector associations are advocating for changes to make it the responsibility to the Social Security Institute. On March 22, El Salvador’s president announced a 30-day quarantine, with the exception of some sectors, including the maquila sector. Under the new regulations, the maquila sector can restart operations with only 20 percent of each factory workforce and must adhere to social distancing and protection measures. On March 14 the congress approved a series of emergency measures to prevent the spread of coronavirus into the country, and now prohibits employers from dismissing or reducing the salary of workers in quarantine or those under migration or sanitation restrictions. The labor guarantee extend up to three months. Medical leave due to the coronavirus will be considered as temporary sick leave for a non-work related illness and the Social Security Institute will provide the medical leave payment. Workers 60 years and older, pregnant workers, and workers with chronic illness are to stay at home and are entitled to the full leave payment by their employer. The Ministry of Labor has developed a digital platform to accept labor violation complaints. The platform includes information on measures to address the spread of the virus and provides guidance to help businesses to apply for economic assistance.

Guatemala: Guatemala’s president announced on March 29 the extension of the nationwide curfew until April 12. The curfew is 12 hours each day, 4:00 p.m. to 4:00 a.m., when individuals are required to remain inside their domicile, with certain exceptions. Violations may result in arrest. The private and public sectors will suspend operations until April 12, but factories continue to operate with adjusted hours. On March 14 Guatemala’s president stated that workers’ minimum labor rights will not be affected if they show signs of fever, cough, sore throat or headache; workers with those symptoms are obligated to seek immediate medical attention and employers are obligated to report any cases to local authorities. Workers over 70 years old and/or diagnosed with chronic illness must work from home.  On March 17, the president mandated a country lockdown and operations in the private and public sector, with certain exceptions, have been temporarily suspended for two weeks.  Based on the presidential mandate, maquila and manufacturing factories can decide to remain open if they are granted authorization from the Ministry of Economy and comply with preventive and protective measures in the workplace and provide transportation for workers. The factories may decide to temporarily suspend operations (for two weeks or less) if they seek authorization from the Ministry of Economy.

Honduras: On March 26 the secretary of Labor and Social Security issued executive decree PCM-021-2020 to confirm that the holidays granted by article 339 of the labor code are valid during the national health emergency but will not be calculated or compensated with the special rate established in article 340. Based on article 348, employers may grant annual leave for the days that workers do not report during the state of emergency. Employers are exempt from the 10-day advance notice requirement for annual leave. Implementation of such actions must include a written agreement between workers and employers that is emailed to the secretary of Labor and Social Security to be validated by the labor authority in compliance with article 379. On March 11, the Honduran Maquila Association held a forum to educate workers on how to detect the virus and prevent its spread in the workplace. Workers will be entitled to 14 days of medical leave pay at 75 percent of their contracted salary at the start of medical leave.

Mexico: Workers who require sick leave shall be paid at least 60 percent of their contracted salary. It is not clear what measures the government will implement in the case of a lockdown, during which temporary work suspensions in the public and private sector could be imposed. While Mexico has not been escalating in new cases, the economy is greatly impacted by the U.S. border closing and the U.S. economy.

Nicaragua: A tri-partite labor agreement designed to prevent the spread of the coronavirus at the workplace and address the consequences of the reduction of production orders was signed on March 24. Under the agreement, employers are authorized to take actions including: grant personal permits with a percentage of worker´s salary; grant advance annual leave; shorten working days (by reducing the number of hours or days); implement remote work or telework; implement temporary suspensions under article 38 of the labor code; and implement other practices that a company considers applicable with workers' agreement. The agreement entitles full compensation to workers age 60 or older, pregnant women, and workers with chronical illness who are temporarily suspended. The measures will be in force for 30 days. Generally, sick leave for non-work-related illness may be granted to workers for up to 26 weeks and can be renewed for another 26 weeks (Nicaragua Labor Code, article 37); workers’ salaries are paid by the Social Security Institute. The first three days of sick leave are typically unpaid unless otherwise stated by the employer. Some FLA members sourcing or producing in Nicaragua have negotiated agreements with unions to suspend operations for 15-business days and provide workers fully compensation.

Peru: The government has suspended certain constitutional rights such as freedom of movement and assembly and has ordered that all workers from the private and public sector (with certain exceptions) must work from home during the emergency. Workers diagnosed with the coronavirus will be temporarily suspended from work without affecting their salary. High-risk workers (immune-compromised and the elderly) must work from home and their labor rights must be respected. On March 26, Peru’s president extended until April 12 the country’s state of national emergency, which includes a curfew from 8 p.m. to 5 a.m. and restricts citizen’s movement. The government has announced short-term measures to help business and workers, including suspension of obligatory pension contributions for one month for low-income salaried workers (earning less than to 1,500 soles). The  government will pay 35 percent of wages for workers earning less than 1500 soles per month; workers are allowed to withdraw up to 2400 soles from their Compensación por Tiempo de Servicios.

United States: Many states have mandated the closure of businesses such as restaurants, non-essential retailers, gyms, and movie theaters. On March 18, the U.S. president signed a bill that provides paid sick leave to workers employed by the government or companies with 50 to 500 employees. Workers who are unable to work because of being quarantined and/or are experiencing COVID-19 symptoms and seeking a medical diagnosis will be eligible for two weeks of paid sick leave at regular pay; or two weeks of paid sick leave at two-thirds of regular pay rate if they are caring for an individual who is subject to quarantine or have to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. There are an additional 10 weeks of paid family leave at two-thirds the worker’s regular rate of pay for those unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Europe, Middle East & Africa

Egypt: A limited curfew has been declared from 7 p.m. to 6 a.m.; this curfew has a limited effect on night shifts in some factories. Otherwise, no lockdown has been declared by the government. No specific guidance or support package has been declared by the government; currently, workers are entitled to paid sick leave with 75 to 100 percent of their regular wages.

Ethiopia: The government shut all land borders except for essential imports. The Confederation of Ethiopian Trade Unions called for owners and managers of public and private sectors to be responsible and take necessary measures to protect workers from this epidemic.

Italy: The government-issued mandatory lockdown of businesses, which suspended all retail and wholesale commercial activities except for basic public services, has been extended to April 13. The government recommends that workers be granted holidays and leave permits to the maximum extent possible. Employers are encouraged to coordinate with work councils and trade unions on the use of holidays and leave time. If a worker is prevented from work due to sickness, medical quarantine or mandatory quarantine, they can use sick leave, paid by the Italian National Social Security Institute; the employer pays the first three days of sick leave. Employers that temporarily suspend operations or temporarily close down may apply for CIGO “Cassa Integrazione Guadagni Ordinaria” and receive support from the Italian National Social Security Institute for the partial to full payment of workers’ salaries for a maximum period of 13 continuous weeks. The government is simplifying the application process for employers to provide financial support to businesses.

Jordan: The government has extended to April 15 a two-week lockdown declared on March 17,  which ordered the closure of both public and private sectors, excluding vital operations like health, pharmacies, food, electricity; public transportation and domestic travel have also been banned. The announcement of the lockdown was followed by a country-wide curfew. Since both lockdown and curfew announcements cover the whole private sector, including garment factories, it is not clear if workers will be compensated during the two-week timeframe. Currently, there is no obligation for employers to pay workers during the lockdown and there is growing concern about the large international migrant worker population that may be living in factory dormitories. 

Portugal: The nation's state of emergeny was extended 14 days on April 2, following a March 19 emergency declaration. There are restrictions of movement of people, meetings, and strikes for vital industries, such as healthcare, defense, security. A financial support package for households and companies effected from the pandemic was announced. Workers will now be able to take paid sick leave without the waiting period.  There is additional support in which workers can receive two-thirds of their gross monthly compensation, up to six months, with the limit of three monthly payments of 1,905 EUR.

South Africa: The government announced a 21-day lockdown that restricts the movement of citizens, except for essential workers like doctors, nurses, and security services, starting March 31. The Southern African Clothing and Textile Workers’ Union, the Apparel and Textile Association of SA, and the SA Apparel Association agreed 80,000 clothing workers would be guaranteed full pay for a six-week lockdown period.

Spain: The government lockdown, announced on March 13, has been extended to April 12. Mass layoffs are taking place while the government has declared some financial measures to help companies, such as suspension of mortgage payments, financial help for the elderly and vulnerable, and safeguards against hostile takeovers. Local laws in Spain allows employers to suspend employment contracts during force majeure cases, such as official health alerts, which would allow employers to not be legally required to provide workers with their legally owed compensation. If companies do not follow legal procedures and suspend work, then the absence of the workers should be treated as paid leave. Any leave time that employees due to the pandemic will be considered as occupational illness. The subsidy, paid by the Spanish Social Security, amounts to 75 percent of the employee’s monthly base contribution, unless the CBA provides that the company must pay additional sums to complete the employee's full salary. The base contribution is the employee’s total monthly remuneration subject to the annually fixed maximum and minimum limits. Currently, the maximum limit for full-time employees is 4,070.10 EUR per month and the minimum ranges from 1,050.00 EUR to 1,466.40 EUR depending on the employee’s professional category. Business closure and mass layoffs are possible under strict provisions defined by government and approval from local authorities is required.

Turkey: The government has issued a controlled lockdown such as closing schools, cafes, restaurants, and limiting public gathering, including mosques, shopping malls. The lockdown includes a curfew for elderly and chronically ill citizens. Employers are urged to follow telework (work from home) alternatives, as much as possible. Employers are obliged to provide safe working conditions in light of existing health and safety regulations. Additional precautions are to be followed by employers, shared by the Ministry of Health and the Ministry of Family, Labor and Social Services. Paid sick leave is available for all workers and covered by the Social Security Administration; paid annual leave is available for workers and covered by the employers. Workers have a right to refuse to work under unsafe conditions through applying workplace health and safety committee and/or local authorities, especially if there are confirmed COVID-19 cases in the workplace; employers must continue to pay salaries until the danger is eradicated. The Turkish government announced several different measures for supporting workplaces suffering from negative effects of the COVID-19 outbreak, such as suspending payments of social security premiums and taxes. The government announced simplification of the short work allowance procedure, where salaries of the workers covered by unemployment insurance and extending the duration for compensatory work to four months.

South Asia

Bangladesh: On March 24 the government imposed travel restrictions; however, has yet to issue mandates for quarantines, lockdowns, or business shut downs. The World Health Organization strongly recommended Bangladesh follow stricter measures and implement lockdowns to slow down the spread of virus. Workers are entitled to receive 14 days of paid sick leave and 10 days of casual leave; mass layoffs are subject to approval of local authorities. Epidemics as a valid reason for legal work stoppage. Employers may lay off workers for work stoppages exceeding three days and must pay severance for workers who have at least one year of service with the employer. NGOs have raised concerns on the drop of purchase orders, delayed payments from buyers, and raw material delays. The president of the Bangladesh Garment Manufacturers and Exporters Association has raised concerns to global buyers on the cancellation of purchase orders and the harm it will cause to workers.

India: Prime Minister Narendra Modi declared a national level lockdown for 21 days, starting March 24. The lockdown has impacted the textile and garment business. Factories, in regions such as Karnataka and Tamil Nadu, were ordered to be closed until mid-April. Although the social security system guarantees 70 percent of salary be paid during sick leave, the government has not declared financial support for employers to provide these payments to workers during the lockdown. The Ministry of Labor warned employers that workers shall not be laid off and be fully compensated during the lockdown period. Mass layoffs are subject to approval of local authorities. The Union Minister of Textile released a video raising concerns about the cancellations of purchase orders by global buyers and the harm it will cause to workers.

Pakistan: On April 1, the finance ministry announced guidelines for disbursement of the Tk 5,000 crore stimulus package for the export-oriented sectors. Human Rights Watch called for the government to adopt measures to protect workers affected by COVID-19< As of March 23, the national government had not declared measures, such as quarantine or lockdown. However, the Sindh provincial government declared a province-level lockdown for 15 days. The Sindh government ordered that workers shall not be laid off and their salaries should be paid in full during the lockdown period. Workers are entitled to receive 16 days of sick or medical leave with 50 percent of pay, and 10 days of casual leave with full pay.

Sri Lanka: The apparel sector will lose USD 2 billion for the three-month period beginning in March due to supply chain disruptions. The government has suspended international flights, closed schools, and postponed public events and meetings. A declaration mandated March 16 as a public holiday, followed by three more days of holiday; however, some factories restarted operations on March 17, with workers being compensated for the public holiday on March 16. One challenge for Sri Lanka is the late delivery of raw materials from China, which may lead factories to take measures like requiring workers to take unpaid leave or reduce weekly working hours. Workers are entitled paid sick leave. Mass layoffs are subject to approval of local authorities.

 

South East Asia

Cambodia: There are reports that work has been suspended at more than 90 garment factories and that some factories are laying off workers without pay. Under Cambodian law, employers must seek government authorization before suspending workers and pay 40 percent of the $190 monthly minimum wage for up to six months. Cambodian workers can receive paid sick leave if a doctor’s note is provided and be compensated 100 percent of wages during the first month of sick leave; 60 percent of wages during the second and third months of sick leave; and unpaid leave from month four to six from the original notice. On February 25, Cambodia issued regulations to support businesses impacted by the outbreak and from the partial withdrawal of the ‘Everything but Arms’ status by the EU. The regulations provide tax breaks and holidays for key industries and reduces corporate income tax by 30 percent over a six-month period for businesses in 19 manufacturing industries, including the garment and footwear sectors.

Indonesia: The government announced a sate of emergency on March 31, although a nationwide lockdown has not yet been enforced. The government will reduce the corporate income tax by 30 percent for businesses in 19 selected manufacturing industries for the next six months. Workers in the manufacturing industry will not have to pay income taxes for six months; these selected industries include textile, leather goods and leather industry for footwear. Workers are entitled to paid sick leave, 100 percent of their salary, for the first four months; after the first four months, the worker’s pay is reduced by 25 percent. Employers may terminate an employee who has been sick for 12 months.

Malaysia: The government has announced loan rescheduling, restructuring, or moratoriums and 100 percent stamp duty exemption from March until December 31. To support labor, 20 million ringgit (US $4.5 million) will be allocated for short-term funding for employees in the manufacturing sector. Through a restriction of movement order issued in February workers are entitled to their salaries and related allowances; employers cannot force workers to use annual leave or go on unpaid leave from April to December. Employee contributions for the Employee Provide Fund have been reduced to four percent, from seven to 11 percent, of the monthly salary from April to December. Workers are entitled to fully compensated paid sick leave; the number of days provided depends on seniority. If an employee has worked less than two years, they receive 14 days per year; more than five years, they receive 22 days per year. There has not been a response from the government to support migrant workers living in dormitories.

Myanmar: The Myanmar Garment Entrepreneurs Association reported 20 factories have closed, leaving more than 10,000 workers jobless. The government announced tax reduction and interest rate cuts, and soft loans and tax exemptions for garment manufacturers, hotels and tourism companies, and SMEs to lesson the economic impact on the country. According to the Ministry of Labor, the Social Security Board will allow small and medium manufacturing enterprises to delay SSB payments no later than three months. If workers are in quarantine for 14 days, that leave will be considered sick leave. Under Myanmar law, workers are entitled to 30 days of paid sick leave per contractual year after the completion of six months of continuous service; sick leave during the first six months of employment can be unpaid.

Philippines: On March 17, the department of Labor and Employment issued Department Order No. 209 to implement CAMP, a program to assist workers with financial support and employment facilitation. The CAMP program will provide financial assistance, equivalent to Php 5,000 (USD97.6), to affected workers in a lump sum, unconditional and regardless of employment status. A leave of absence during the quarantine period is to be charged against workers’ leave credits and the CAMP financial assistance may be used to cover remaining unpaid leave for workers. The program will provide affected workers access to available job opportunities suitable through job matching, referral, and placement services either for local or overseas employment, employment coaching, and labor market information. Workers are entitled to five days of paid service incentive leave, which can be used for vacation or sick leave.

Thailand: The prime minister rolled out a 400 billion Baht economic boost and cut bank interest rates to almost zero; the efforts are not specific to manufacturing. According to the Labor Protection Act, a virus infected employee who must undergo the aforementioned procedures will be entitled to at least 30 days of paid sick leave and then can use paid personal leave.  A worker who has been employed for one full year shall have at least six paid leave days. Only after sick and paid leave has been used, can an employer enforce leave without pay.

Vietnam: The government will delay the tax payment deadline for companies in agriculture, footwear, automotive, aviation, textiles, electronics, food processing, and tourism, among other sectors, for five months and delay land-use fees. Companies can suspend two of the four types of social insurance employers contribute to, pension and survivor insurance. Vietnamese employees who have paid into the Social Insurance Fund for less than 15 years are entitled to take a maximum of 30 days paid sick leave per year. This benefit increases to 60 days of paid sick leave after 30 years of insurance contributions. The National Insurance Fund is responsible for the payment to workers that are quarantined due to the virus.

Originally posted March 25.