EXECUTIVE SUMMARY

COVID-19: Implications for

employment and working life
Introduction while the share of workers employed but not working
more than doubled to 17%. There are significant
Eurofound established the COVID-19 EU PolicyWatch differences between Member States.
database in March 2020 to provide policymakers with £ More workers moved from employment to inactivity
information on measures taken to mitigate the impact of than from employment to unemployment between
the coronavirus disease 2019 (COVID-19) crisis on the Q1 and Q2 2020, and, in the face of declining job
labour market and wider society. At the same time, an vacancy rates, many people were not seeking work.
e-survey, ‘Living, working and COVID-19’, was conducted
£ There was also a significant drop in the share of
and activities to monitor labour market trends and
temporary contracts.
restructuring were continued in an effort to capture the
fallout from the pandemic. £ Young people were most impacted by reductions in
employment levels. They were also highly
represented among furloughed groups. Prime-age
Policy context workers (25–54 years) and older male workers were
The pandemic has had an unprecedented impact on the most likely to be working reduced hours.
economy, the labour market and society. At the EU level, £ While the 2008–2010 financial and economic crisis hit
financial and other support measures, including the the male-dominated manufacturing and construction
Support to mitigate Unemployment Risks in an Emergency sectors in particular, the COVID-19 pandemic mainly
(SURE) instrument and Recovery and Resilience Facility affected the more female-dominated accommodation,
(RRF), have assisted Member States in mitigating its impact. food and beverage, travel and tourism and arts and
entertainment sectors. This was somewhat
Member States have also implemented a range of policy
balanced by a rising demand for workers in other
measures to reduce the impact of the pandemic. Following
female-dominated sectors. The 2008–2010 crisis saw
on from Eurofound’s earlier report, COVID-19: Policy
the greatest losses in the middle of the wage
responses across Europe, this report provides an updated
distribution whereas, up to Q2 2020, the COVID-19
insight into the types of policies adopted at the national
crisis had impacted mainly on the lowest paid workers.
level.
£ Another reason for the differential impact of the
pandemic was the large shift to telework. By July 2020,
Key findings nearly 50% of the EU workforce had moved to exclusive
or partial telework. As this option is not available to all,
Labour market impact this opens up new labour market gulfs, as the more
£ In Q2 2020, 5.7 million fewer people were in highly educated and those in urban areas are more
employment than in Q4 2019, and the EU27 likely to have their jobs protected through the ability to
unemployment rate increased from 6.6% to 6.7% over telework.
the same period. However, a clearer picture of the
impact of COVID-19 on the labour market emerges Social partner response
when trends in weekly hours worked and the share of £ The involvement of social partners was generally more
those employed but who did not work are considered. limited than would be the case outside a crisis
Between Q2 2019 and Q2 2020, EU employment situation. However, in some countries, the need to find
declined by 2.4%, average weekly hours worked of rapid solutions to common problems contributed to a
those who attended work reduced by nearly one hour, reinvigoration of social dialogue.
Short-time working and temporary lay-off £ The main challenges to implementation were the
schemes schemes’ novelty, the speed with which they were
introduced, the need for greater clarity around
£ Supported by the SURE instrument in 18 countries,
eligibility, and bottlenecks in processing applications.
short-time work or similar measures were
implemented in all Member States and contributed Mortgage/rent deferrals and hardship funds
greatly to limiting the rise in unemployment.
£ Mortgage moratoria and rent deferral measures were
£ Workers on casual contracts, as well as agency workers introduced in most Member States to ensure short-
and in some cases fixed-term contract workers, term housing security. However, the schemes mainly
remained excluded from access to these schemes. served to delay payment commitments, leaving
£ One-quarter of all Member States reserved access to question marks over longer-term impacts.
short-time working schemes for employers £ The pandemic aggravated existing problems in social
experiencing a drop in revenue of more than 25% assistance systems, including limited access, poor
and/or with over 30% of the workforce impacted by a targeting and inadequate benefit levels. To address
reduction in working time. The income replacement this, at least 12 Member States adjusted their social
rate received by employees for hours not worked assistance measures to bolster the support offered to
ranged from 60% to 100%, with the levels of income vulnerable groups. However, such support was
actually received sometimes significantly below this significantly more limited than that offered to
rate as a result of the cap applied to maximum businesses and workers.
payments granted. Duration of access also varied,
from 2 to 21 months.
£ During the first wave of the pandemic, approximately Policy pointers
20% of the workforce benefited from some of these £ Consideration should be given to the permanent
measures at some stage. establishment of short-time working or similar systems
£ At least 13 countries offered dismissal protection that can be activated in crisis situations. The eligibility
beyond the period of eligibility for short-time working criteria for such systems and duration of access should
allowances, ranging from 1 month to over 12 months. seek to avoid deadweight and other effects preventing
Five countries extended dismissal protection to an the structural adjustment of economies and human
employer’s whole workforce. resources.
£ The take-up of training during the ‘downtime’ £ Planning should be put in place for emergency
associated with short-time working and temporary situations to enable the strong involvement of social
unemployment was low because of a lack of planning partners and other stakeholders, prevent unforeseen
for training requirements, limited resources due to the exclusion in relation to eligibility and other anomalies,
crisis, and the continued absence of suitable training. contribute to fairness and ensure transparency and
£ Knowledge about SURE remained low in September buy-in.
2020. Few countries expressed concerns about delays £ Income replacement rates offered by employment
in negotiations around funding decisions linked to protection schemes for all workers and self-employed
eligibility, but it was equally acknowledged that the people need to be suitably geared towards preventing
availability of SURE enabled new or extended support hardship, to avoid additional costs to welfare systems
measures to be offered to workers and self-employed in the absence of adequate income support.
workers. £ Staff capacity in administering institutions should be
sufficient to avoid delays in making grant payments.
Income support for self-employed people
£ Further policy support for the take-up of training
£ The pandemic provided the impetus to extend income during downtime is needed. Investment in training and
protection to groups not previously protected. active labour market policy measures is key to a
However, the protection granted to self-employed sustainable recovery.
people fell short of that provided to workers.
£ Eligibility criteria led to sectoral restrictions, limitations
to certain groups of self-employed workers and
requirements to meet income reduction thresholds.

Further information
The report COVID-19: Implications for employment and working life
is available at http://eurofound.link/ef20050
Research manager: Tina Weber
[email protected]

European Foundation for the Improvement of Living and Working Conditions EF/20/050/EN 1