Law On Unemployment Insurance More Like New Kind of Deception of Population

Baku / 15.06.17 / Turan: In the Milli Majlis, the draft law On Unemployment Insurance was adopted in the first reading, providing for mandatory payments from the salary of employed people and incomes of employers to the insurance fund for the issuance of compensations to the unemployed.

In the text of the law, insurance premiums on the part of the insured employee make up 0.5% of the salary, and insurance premiums on the part of the employer are 0.5% of the calculated wage fund. If the insurance period of the employee is 3 to 5 years, he will receive an unemployment benefit in the amount of 50% of the average monthly salary, and if the employee has an insurance period of 5 to 10 years, then he will get 55% of the average monthly salary. If it is above 10 years, then he will have 60% of the average monthly salary.

According to the new law, the payment is appointed for 6 months. If during this time the insured has not found work, then the payments are extended for another 3 months, and the amount of the payment decreases every month to the minimum level. Half of the premiums accumulated in unemployment insurance will be directed at measures to ensure the self-employment of unemployed citizens. It is expected that the premiums for this type of insurance each year will be AZN 50 million, and AZN 25 million of that will go to self-employment activities. This is the lowest figure in the world, as in some countries the contribution is up to 3-5% of the wages.

In society, this law is discussed as one of the ways to withdraw money from the people"s pocket, recalling the yearly increasing age of citizens" retirement, to which many people do not live now.

The Chairman of the League for Protection of Labor Rights of Citizens Sahib Mammadov explained to Turan that with the adoption of this law, an employer who concludes labor contracts with employees, attracting workers to compulsory state insurance will insure employees not by 22%, but by 22.5% of the salary. From the salary of employees, not 3%, but 3.5% will be withdrawn to the social insurance fund.

It is planned that about 80-85 million manat will be received annually into the Fund. The insurance from this Fund will be received only by dismissed workers who have labor contracts. And this means that insurance payments will be received not more than for six months by very few unemployed, since in Azerbaijan they are dismissed basically after the expiry of the term of employment contracts, and not by staff reduction.

The Ministry of Labor and Social Protection supposed to give out insurance even if the employee was dismissed by its own will, but the Ministry of Finance "stabbed" the bill and now only those who are dismissed by staff reduction or the closure of the enterprise will receive the money," Mammadov added.

The law will enter into force on January 1, 2018. A similar law is in force in Turkey.

In Russia, in the future, they can return to the insurance model of financing unemployment benefits, said the Minister of Labor Maxim Topilin. In Russia, from the early 1990s to 2001, there was an extra-budgetary Employment Fund, which was filled by collecting contributions at a rate of 1.5-2% of the wage fund. But now, unemployment benefits are financed out of the general revenues of the federal budget, in fact being a form of state social support. The Ministry of Labor made calculations, according to which it turned out that even 1% of deductions from the salary fund would have been enough to protect those who lost their jobs, Topilin told RBC. -0-