08 May 2020 – The Formal Employment Support Program (PAEF) launched

Type of Intervention: Executive Order, Financial and Economic, Specific Action
Sectors Involved: Finance/Economy
Level of Jurisdiction: National
Lead People/Agency: Decision made by: President of the Republic and Cabinet of Ministers
Implementation of the intervention is leading by Ministry of Finance and Public Credit and the financial entities

Overview: The formal employment support program -PAEF is created, within the framework of the State of Economic, Social and Ecological Emergency, charged to the resources of the Emergency Mitigation Fund -FOME, as a State social program that will grant the beneficiary thereof a monthly monetary contribution of a state nature, and up to three times, in order to support and protect formal employment of the country during the pandemic of the new coronavirus COVID-19.

The amount of the state contribution that the beneficiaries of the Formal Employment Support Program – PAEF will receive will correspond to the number of employees multiplied by up to forty percent (40%) of the value of the current legal monthly minimum wage.

The Formal Employment Support Program – PAEF will be in force for the months of May, June and July 2020. Beneficiaries may only request, once a month, the state contribution that this program deals with up to a maximum of three times.
Full details here: https://coronaviruscolombia.gov.co/Covid19/docs/decretos/minhacienda/289_DECRETO_639_DE_2020.pdf

Other links: 1
Type of Justification: Advice of INTERNAL government advisory committee or group, Advice of EXTERNAL expert advisor or advisory committee, Survey
Source of Evidence or Justification: National – government, National – other, International Monetary Fund
Evidence/Justification: For May 6, 2020, the Ministry of Health and Social Protection reported 8,959 cases of COVID-19 and 397 deaths caused by the virus in the country.

That the pandemic of the new coronavirus COVID-19 has generated adverse economic and social conditions, not only because of the greater needs for resources in the health sector, but because of the confinement decisions that have been taken to protect the spread of the virus in the country.

The International Monetary Fund, through Press Release 20/114 of March 27, 2020, published the “Joint Statement of the President of the International Monetary and Financial Committee and the Managing Director of the International Monetary Fund”, which states:
“(…) Targeted fiscal support for vulnerable households and businesses should be prioritized to accelerate and solidify recovery in 2021 (…)”.

The confinement decisions, together with other measures related to the reduction of mobility, the agglomeration and the congregation in public places, generate an affectation of the different economic activities, employment, industry and commerce, particularly the business sector. , which cannot continue operating under normal conditions and finds it difficult to maintain its economic activity. In this sense, it is considered necessary to grant payroll support to guarantee workers the ability to cover the expenses necessary to
his support and that of his family, including health expenses, education, public services, among others, a situation that affects the social and economic net of the country.

According to the CONFECAMARAS COVID19 impact measurement survey, as of April 17, 85% of companies report having no resources to cover their obligations beyond 2 months, and about 54% of employers expect decrease your staff plant in the next 3 months.