3.6 Integration of young people in the labour market
Recognizing that employment is a key mechanism for the successful integration of young people into society and that it is closely related to other aspects of life, the Government of Montenegro adopted the Youth Employment Support Program. The program should contribute to the creation of preconditions for mitigating the negative consequences caused by prolonged youth employment.
Youth employment measures
• The Institute's work program plans to implement two measures from the Youth Employment Support Program for 90 unemployed persons with higher education. These measures are implemented through the "Support for the training and employment of young people in inspection supervision" program, in cooperation with the Directorate for Inspection Affairs, for 60 participants.
• The program "Youth as support for the development of agriculture", in cooperation with the Ministry of Agriculture, Forestry and Water Management, for 30 participants. The participants of the mentioned programs established an employment relationship lasting nine months
Participants of both programs "Support for the training and employment of young people for the tasks of inspection supervision" are engaged in providing technical and administrative assistance to officials during inspection supervision, while the participants of the program "Youth as support for the development of agriculture" are engaged in providing support to advisory services in the Ministry of Agriculture, Forestry and Water Management, in the preparation of project applications of farmers for the allocation of IPARD program funds.
The largest percentage of employed respondents are working in a public sector enterprise 47.2%, followed by those employed in the private sector 37.3% and in civil society organizations 9.2%. Although at first glance this might come as a surprise, when data are cross-referenced with programmes that yield the best employment outcomes – “Stop the grey economy” and “Public works” – the result makes more sense, as both programmes were designed to subsidize employment in the public sector. Over 85.5% of participants in the “Stop the grey economy” programme reported employment in state-owned enterprises, along with 45.7% of those who participated in the “Public works” programme. On the other hand, most of those who were previously unemployed and took part in the “Acquisition of qualifications” and “Acquisition of skills” programmes ended up employed in the private sector over 55%.
In order to mitigate the economic consequences caused by the epidemic of the corona virus (COVID-19), it was decided to continue with direct subsidization of the wages of employees in economic entities, whereby the dominant criterion was a significant decrease in income of economic entities and entrepreneurs who perform activities based on real income, i.e. a decrease in turnover among entrepreneurs who are taxed flat-rate. This type of support is an integral part of the Measures to support the economy and citizens for the second quarter of 2021, and its primary goal is to preserve jobs and create assumptions for further recovery of the economy.
Through the measures to support the economy, the Government of Montenegro has foreseen a special measure to encourage new employment in 2021, which is implemented through a proposal to amend the law in the area of personal income tax and contributions to mandatory social insurance.
As announced by the Ministry of Economic Development, the main reasons for the implementation of this measure are contained in the need to, due to the negative consequences that the pandemic had on business operations, and consequently on the reduction of the number of employees, enable business entities to re-employ some of the unemployed persons from the ZZZCG records with significant benefits and incentives for employment.
Beneficiaries of this measure can be those employers who establish an employment relationship for an indefinite period of time with a person who has been on the records of the ZZZCG for at least 3 months, with the possibility of hiring that person previously under a trial work contract for a duration of up to 3 months. The employer is exempted from the obligation to pay the mentioned taxes and contributions for salaries, up to the maximum amount of the average gross salary in Montenegro in the previous year, namely: 90 percent of taxes and contributions for salaries paid in 2021; 60 percent of taxes and contributions for wages paid in 2022 and 30 percent of taxes and contributions for wages paid in 2023. Contributions for pension and disability insurance for persons for whom the right to exemption from payment of these contributions is exercised, are settled from the budget of Montenegro