I would like to mention the following regarding Labor’s requirements for employees to earn Awg 950.
My opinion only concerns the HORECA industry.
March salaries: does this mean that hours worked are to be paid? Or should full salaries be paid irrespective of actual hours worked?
Those companies that closed their doors before the end of March (all of us) and sent employees home on mandatory vacations have 2 choices
- Pay accrued vacations with the March salary
- Pay accrued vacations at the end of April.
Would option B be considered as full payment of the March salary?
As to the “Action plan” to be presented, the plan has a financial and an economic component
Financial component: Companies like ours, that have suddenly closed, will not earn any income for an undetermined period of time, undoubtedly for at least 3 months (optimistic scenario).
This means we have a fixed stock of money available, and also money in perishable food.
We have payments to make in addition to payroll, i.e.: Vendors, Web, ELMAR, Gas, Water (Feb and March), Rental, Advertising, Insurance, Bank debt, Taxes, Pension Funds, SVB.
This means we have to manage our stock of money so as to avoid being sued by our creditors. We may file a sworn statement of funds available and financial liabilities for the next 3 months. But what if this last 6 months?
Economic component: Most of the companies in our industry intend to go back to business as soon as Aruba opens its borders and tourists come back to the island.
For this to be possible, we need to have the funds necessary to reopen. Our return to operations will most likely be very slow, progressive and difficult to manage.
Our facilities will require profound refurbishment that will imply high maintenance costs (the longer we remain closed, the more expensive it will be to reopen); we will have to buy goods, especially F&B, and employees will need cash to commute until they earn their first salary.
Working capital will be required, even if minimal.
Is very important to consider that we have an operational structure and costs for a business that will be 40, 50, 60% smaller for the 3 or 4 months after reopen.
It does not apply to HORECA: we are closed and not in a position to even give one working hour a day to any employee.
It is important to point out that we are closed for a very serious reason absolutely unrelated to any decision on our side.
The Government was forced to close the borders (and they fortunately did) which forced us to close our businesses.
The resort where we are located is fenced! Even if we want it, we can no operate in any way.
HORECA is in a coma. This is a fact.
Starting today Aruba is in Intensive Care Unit.
We have all complied with Requirement 1 in some way or another.
Requirement 2 merits a comment or proposal for action.
Two instances might help us have funds to honor our financial liabilities and pay part of salaries even without going back to business.
So far, assistance to the business sector provides some relief to those who were in arrears of their SIAD payments. Those of us who were not were only granted a BBO and payroll tax deferral. We do not have to pay right know but are accruing a liability.
This amount that is payable on April 15 could be used to pay salaries at the end of April, so that everyone receives something: tax amount / number of employees.
This, unless the Government should exempt us from paying, if we prove that all of that money will be used to pay salaries. If so, this payment should take a special form so as not to accrue a new AOV liability, etc.
To date, banks are examining each case to decide whether to put off for 3 months the commercial lending due dates.
This financial “aid” adds a future interest to borrowed amounts.
So far, the financial sector is not contributing anything nor providing any assistance, as they like to put it, in this crisis.
If banks waived these 3 months’ instalments, we might use their contribution to increase the amounts payable in April to our employees.
This could be easily monitored by Government to prevent those resources from being misused.
In my case, this means Awg 1,300.- per employee approximately. More than FASE
These two options would help the Government by giving it one more month to access the so necessary lending; they would also help the domestic economy since these funds would have a direct positive impact on consumption.
I hope these ideas will help us pave the way out of this unexpected and unprecedented crisis.