Act on Intervention Measures to Salaries and Contributions
We would like to inform you that on 20 March 2020, the National Assembly of the Republic of Slovenia passed the Act on Intervention Measures to Salaries and Contributions. The act will be published in the Official Gazette of the Republic of Slovenia on 27 March 2020 and will enter into force on 28 March 2020. We have summed up the main points below. The act regulates the partial compensation of salaries to employees who are unable to perform work due to measures related to the coronavirus. Not all employers will be entitled to the partial compensation, but only those that meet the legal criteria and who act in accordance with the procedure foreseen by the act. Of course, no case law exists yet and answers to certain questions will have to wait to be resolved by the act.
In what cases will employees be able to claim the compensation reimbursement?
The act regulates two separate cases, i.e. compensation reimbursement in the case workers will not be working for business reasons and in which workers will not be performing work due to an issued quarantine.
Which conditions must be met for the existence of a business reason?
Pursuant to the intervention act, a business reason exists in the event the employer cannot guarantee work to at least 30% of the workers or in the case of an employer with one employee, at least 50% of the employee’s working hours in an individual calendar month due to reasons that are the consequence of the coronavirus.
What about quarantine?
Pursuant to ZDR-1, any employer who states that they cannot organize work from home for these employees has the right to claim compensation for workers who have been ordered to be in quarantine with a decree by the Ministry of Health.
Who is entitled to claim reimbursement?
The reimbursement can be claimed by a company, cooperative or natural person who employs workers and determines that a business reason temporarily prevents at least 30% of the workers from performing work. These workers do not include workers in the termination notice period.
An employer employing a single employee will meet the condition for claiming reimbursement if they determine that they cannot ensure work for a total of at least 50% of the working hours for an employee in an individual calendar month.
In order to be entitled to claim partial compensation reimbursement, the employer must strive to retain employment positions of the temporary laid-off workers for at least 6 months after the start.
In what cases are employers not entitled to exercise their right to reimbursement?
Employers cannot exercise the right to a partial compensation reimbursement,
• Until the workers whom they want to temporarily lay-off have an unequal distribution or temporary reallocation of the working time or an excess of hours in the reference period, and that this excess can be set off. The employers can still be entitled to the partial reimbursement in individual cases if objective reasons exist that the employee’s excess work hours cannot be set off;
• If, on the day of the submitted claim, they have unpaid due statutory tax duties and other non-tax obligations collected by the tax authorities in the amount exceeding EUR 50;
• If the salaries and social security contributions were not regularly paid in the last three months prior to the temporary lay-off;
• If an insolvency proceeding or compulsory winding up has been introduced against the enterprise.
Pursuant to the intervention law, the employer can temporarily lay-off an employee for a maximum of three months.
To what extent will the paid compensation be reimbursed?
The act stipulates that the amount of the compensation reimbursement the employer can expect from the Service or for which reimbursement will be possible will amount to 40% of the compensation of the gross salary (I gross), wherein the amount of reimbursement is limited to the maximum amount of monetary compensation for unemployment, as determined by the law regulating the labour market, i.e. EUR 892.50.
What are the timeframes of the compensation reimbursement?
First of all, it is important to know that an employer can claim the compensation reimbursement after the intervention act has entered into force even if the employees had been temporarily laid-off according to the procedure laid out in the act before it was passed.
However, in the event of the lay-off before the act has entered into force, you will not be able to claim reimbursement. The draft of the proposed act states that in the event that the employer files a claim to exercise the stated right no later than within eight days after the act has entered into force, if they pass all the conditions pursuant to this act, and is also entitled to a partial compensation reimbursement, but not retroactively (i.e. for salary compensation that had been paid before the act was passed), but only for the period after the act has entered into force.
The employer can exercise the right to a partial compensation reimbursement only once and for no longer than three consecutive months. The eligibility applies until no longer than 30 September 2020.
For what period can employees be temporarily laid-off for the employer to be entitled to a partial compensation reimbursement?
An individual employee can be temporarily laid-off for a period of up to three months. In accordance with the reasoning of this provision, any possible temporary suspensions are not added to this period. This means the time during which an employee is absent due to illness or injury, annual leave, as well as if the employee temporarily returns to the workplace at the employer’s request does not count into this period.
What procedure must the employer follow to claim compensation reimbursement for business reasons?
The procedure is as follows:
1. Determination of a business reason that is the consequence of the virus (inability to provide work for at least 30% of the employees in the event of an employer with one employee, at least 50% of the employee’s working hours in an individual calendar month)
2. Consultation with the union,
3. Decision to temporarily lay-off employees
4. Temporary lay-off of employees with a written notification specifying the duration of the temporary lay-off, the obligation of the employee to return to the workplace at the employer’s request, the options and manner of appeal to the employee to prematurely return back to work and the salary compensation;
When must the employer submit the application?
An employer submits the application for partial compensation reimbursement with the Employment Service of Slovenia (in electronic form or with a written application) within 8 days of the employee’s temporary lay-off, but no later than including 30 September 2020 OR within 8 days from the date of the intervention act entering into force, if the employer had temporarily laid-off employees before the intervention act entered into force.
What are the employer’s obligations during the employees’ temporary lay-off?
Employers have the following obligations:
• Paying salary compensations and social security contributions
• Restriction on initiating terminations of employment contracts for business reasons
• Restriction of ordering overtime if the work can be done by the temporarily laid-off employees
• Prior notification of the ZRSZ, if the employer orders the employee to return to work or if the employer replaces the temporarily laid-off employee with another worker
The employer is also obligated to retain the jobs of those employees who have been temporarily laid-off under the intervention act for 6 months from the individual employee’s date of lay-off.
If an employer acts contrary to the first three indents above or does not preserve the employment in accordance with the intervention act, the received funds will need to be repaid in full.
If an employer does not give prior notification to the Service regarding the employee’s return to work or the replacement of a temporarily laid-off employee, the received funds will need to be repaid for the employee regarding whom irregularities have been determined.
What does this mean for redundancies?
Pursuant to the reasoning of the intervention act, the employer has two separate obligations: one is the preservation of jobs for at least 6 months for those who have been temporarily laid-off and the other is a general ban of termination or initiation of redundancy procedures of all workers employed by the employer for business reasons during the period in which the employer is included in the intervention measures, i.e. 3 consecutive months. Pursuant to the act, this means an employer who is included in the measure e.g. cannot initiate the process of collective redundancies (preparing a program of redundancies, informing the union and employment service), not terminating employment contracts for business reasons. In light of the fact the proposed act is limited only to terminations for business reasons regarding terminations during the period of being included in the intervention act, both the employee and the employer can terminate the employment contract for all other reasons determined in ZDR-1 if such reasons exist.
What is the proper procedure for workers in quarantine?
The procedure is the same for claiming compensation reimbursement for an employee who has been quarantined and cannot perform their work from home (without consulting with the worker representatives or notifying the employees and ordering a lay-off for the period of the ordered quarantine). In this case, the employer encloses to the application:
• A copy of the decree by the Ministry of Health and
• A statement that work from home cannot be arranged for the employee.
What about self-employed people?
Pursuant to the intervention act, the self-employed are not entitled to the partial compensation reimbursement for a temporary lay-off; the act does, however, enable deferred payment for the contributions that will be due in April, May and June 2020. The deferred contributions will have to be repaid by 31 March 2022. During this period, the deferred contributions can be paid in a lump sum or in instalments.