Companies Return COVID-19 Aid Funds to Icelandic Government

origo

Six Icelandic companies have announced they will either return or stop taking advantage of the government’s partial unemployment funds intended to help companies avoid layoffs due to the economic impact of COVID-19. Mbl.is reports that none of the companies are facing operational difficulties and as a result have decided to pull out of the initiative, whereby the government pays up to 75% of employee salaries.

Computer support and services company Origo put 50 employees on the partial benefits scheme on the same day it announced an ISK 425 million ($2.9 million/2.7 million) first-quarter profit. Origo then backtracked on the decision to seek government support last Monday. Company Esja Gæðafæði ehf. decided to repay the ISK 17 million ($117,000/€107,000) it had received from the government through the initiative. Seafood company Brim, fuel company Skeljungur, and retailer Hagar have also decided to repay the government funds they received. Retail company Festi also decided to stop its participation in the scheme.

Iceland’s Directorate of Labour was criticised for failing to monitor whether companies who were taking advantage of the government funds had in fact lost profits and therefore required the funds to pay salaries. The organisation’s director has stated that the Directorate’s efforts were focused on minimising layoffs, but a review of companies who have participated in the scheme will begin in the fall at the latest.