When is the payment of my Unemployment Insurance suspended and how am I notified?

In countries like Chile, Ecuador and Colombia, there are laws that protect workers in crisis situations. Thanks to Unemployment Insurance, millions of employees receive a benefit to mitigate their financial situation. COVID 19 has led to the massive layoffs of employees and the closure of many companies. But when the payment of your Unemployment Insurance is suspended you can notify it.

When is the payment of my Unemployment Insurance Suspended and how am I notified?

Since Unemployment Insurance guarantees protection to employees when they are suspended from their employment or their working hours are reduced. It may be that you were unemployed and for a time you received the Unemployment Insurance benefit, but you already have another job and want to suspend the payment of your Unemployment Insurance. Here we will explain all the details.

Unemployment Insurance

The Unemployment Insurance changes depending on the country, however, its mission is basically the same: protect employees by a monetary benefit for a period of time when they are suspended or reduced their working hours .

This suspension occurs by act of the Ministry of Health, such as quarantine. The reduction of working hours is reached by an agreement between the employer and employee to collect the insurance , this may happen because the company is going through an economic recession.

Suspend the payment of my Temporary Unemployment Insurance

The temporary work suspension is a legal figure between the employer and the employee, in the event that the company decides to close due to lack of income or because it cannot continue to carry out its commercial activity. In this way, you send your employees home, however, the employment contract is not broken.

We could illustrate it this way: Suppose that Juan is the owner of a Lonchería and due to the quarantine he states that he cannot continue working due to the lack of income, so he decides to take refuge in the law and execute the temporary work suspension on his employees.

Requirements to activate the temporary work suspension

To activate the temporary work suspension, you must meet these unemployment insurance requirements:

  1. There must be a mutual agreement between both parties.
  2. A decree is issued by the health authority, as in the case of mandatory quarantine.
  3. The income of the company has a decrease equal to or greater than the 20% VAT net services.

Quote to be paid by the employer during the suspension of work

  • The employer must cancel the quotation of 100% ASP and SIS , it is calculated based on the remuneration of the last 3 months.
  • You must pay the AFC health contribution, SENA law, it is calculated at 100% of the tax base.
  • Pay the working days.
  • Cancel the taxable income of the previous month, at the beginning of the work suspension. The necessary contribution that the employee must have to collect the Unemployment Insurance varies according to the laws of each country; however, it is usually 3 or 6 continuous or discontinuous quotes in the last 12 months.

When is the payment of my Unemployment Insurance suspended and how am I notified?

If at one time you were unemployed and collected Unemployment Insurance , but now you found a new job, this insurance is suspended the following month in which the AFC  receives notification of the beginning of your new employment relationship through the following:

  • Cancellation of a quote after settlement made by the same employer or by the new one.
  • When the notice of the beginning of a new employment relationship of the affiliate is made by the new employer.
  • The employer makes a declaration without cancellation of the contributions.

As you can see, as soon as you start a new employment relationship, Unemployment Insurance is suspended the following month in which the AFC receives the notification and this can be through the three ways that we describe in this article.

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