ANTICORONA PACKAGE – current measures to assist employers (UPDATED 29 April 2020)
On 28 April 2020, the National Assembly of the Republic of Slovenia passed the Act Amending the Act Determining the Intervention Measures Act to Curb the COVID-19 Epidemic and Mitigate Its Impact on Citizens and the Economy or the #anticorona package (#PKP1), also known as the “mega act”, which foresees the introduction of new measures to preserve jobs. #PKP1 amends the existing measures pursuant to the Intervention Measures for the Labour Market and Parental Protection Act (ZIUPPP). The act was published in the Official Gazette of the Republic of Slovenia on 10 April 2020 (ZIUZEOP-A i.e. amendment #PKP1), which entered into force on 11 April 2020. #PKP1 foresees the introduction of new measures to preserve jobs and amends existing measures pursuant to the Act on the Interim Measure of Partial Reimbursement of Wage Compensation (ZIUPPP). The #PKP1 amendment introduces additional limitations for implementing the measures, provides narrower definitions of individual solutions and introduces some new measures. The amendment will enter into force on the day after its publication in the Official Gazette of the Republic of Slovenia (projected for 7 May 2020), wherein certain changes are planned to be valid retroactively. Before the act was even published, certain interpretations and explanations were available from institutions like FURS, MDDSZ and ZRSR. Read on for a summary of the proposed measures in the field of labour and some answers or our positions regarding some of the initial questions. Of course, no case law exists yet. All of the changes brought by the #PKP1 amendment are written in italics, while text that is no longer relevant is deleted regularly. We have also added some explanations regarding rules for state aid that influence measures relating to labour law. There are still a number of ambiguities regarding certain issues, as well as new explanations every day from the relevant authorities, so this article will be regularly updated. Additional legal information is regularly published on our website. We can do it together, stay healthy!
(NOTE: This is an updated version of a post published on 10 April 2020 and available at the link https://www.jadek-pensa.si/en/anticorona-package-current-measures-to-assist-employers-updated-on-10-april-2020/.)
1. WHAT ARE THE MAIN TEMPORARY MEASURES PROPOSED BY THE #ANTICORONA PACKAGE IN THE FIELD OF LABOUR?
The main measures are, under certain conditions (more on these under questions 2, 5 and 8):
- A full compensation reimbursement of employees’ salaries who have been temporarily laid-off due to the employer’s inability to provide work due to the consequences of the new coronavirus epidemic in the amount of 80% of the basic salary, and the exemption of payment of contributions tied to salary compensations, both to the maximum mentioned amount (see question no. 14);
- A full compensation reimbursement for employees’ salaries for their absence due to force majeure in the amount of 80% of the basic salary and exemption of payment of contributions relating to such salary compensations, both to the mentioned maximum amount (see question no. 14);
- Exemption of the payment of contributions for retirement and disability insurance and the obligation of paying a crisis allowance in the amount of EUR 200 for working employees;
- Reimbursement of the monthly crisis allowance that was paid to handicapped people for handicapped companies;
- Exemption for the payment of contributions for occupational insurance;
- Extraordinary assistance in the form of a basic monthly income for the self-employed, religious servants and farmers;
- Exemption for the payment of contributions for the self-employed, religious servants, partners and farmers;
- A right to compensation during the temporary absence from work due to illness or injury by obligatory health insurance from the first day of the absence onward.
2. DO THE MEASURES FORESEEN BY #PKP1 CONSTITUTE STATE AID?
Yes, the #PKP1 measures to assist employers constitute state aid, which can only be appointed in accordance with EU regulation and with prior confirmation of the state aid scheme by the European Commission, e.g. based on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (“Temporary Framework”).
The #PKP1 amendment follows the guidelines detailed in the Temporary Framework to determine to additional key limitations in granting aid:
– aid will not be granted to undertakings in difficulty on 31 December 2019 pursuant to EU legislation and
– the total amount an individual undertaking can receive generally cannot exceed EUR 800,000 gross (before taxes and other duties). The latter generally includes all grants of state aid pursuant to #PKP1.
3. WHAT CONSTITUTES AN UNDERTAKING IN DIFFICULTY?
According to the definition of Block Exemption Regulation (Commission Regulation (EU) no. 651/2014), an undertaking in difficulty is an undertaking in respect of which at least one of the following circumstances occurs:
– a limited liability company (other than an SME that has been in existence for less than three years), where more than half of its subscribed share capital has disappeared as a result of accumulated losses;
– where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors;
– where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee or has received restructuring aid in is still subject to a restructuring plan;
– in the case of an undertaking that is not an SME, where for the past two years the undertaking’s book debt to equity ratio has been greater than 7.5 and the EBITDA interest coverage ratio has been below 1.0.
4. WHAT IS INCLUDED IN THE MAXIMUM AMOUNT OF EUR 800,000?
The maximum amount of EUR 800,000 gross pertains to the total aid in the form of grant funds, repayable advances, tax or payment benefits based on the COVID-19 intervention measures. It constitutes the total amount of the PIZ contribution exemption, compensation reimbursements to furloughed employees, contribution exemptions for furloughed employees, as well exemptions of water charge basis and water rights payments.
When calculating the total amount of received aid, any other received DP based on the intervention acts during the pandemic are also included. However, the cumulation of the granted aid de minimis that was granted in accordance with the Block Exemption Regulation is expressly allowed – both can be granted by the state without previous confirmation of the European Commission pursuant to the relevant European Commission Regulation. This amount also does not include measures in the form of state guarantees for deferred tax liabilities. It also does not include any state aid the country may introduce to reimburse the damage the pandemic has caused to especially affected undertakings / sectors (pursuant to Article 107(2)(b) of the PDEU) – it is understood the state is already planning to do this, but no Government decree about this has not been passed and presented to the European Commission for prior confirmation.
5. WHAT HAPPENS IF THE TOTAL AMOUNT OF RECEIVED FUNDS EXCEEDS EUR 800,000? WILL THE RECEIVED AID NEED TO BE RETURNED IN THAT CASE?
Two exceptions have been foreseen regarding the described limitation of the maximum amount of aid. State aid for co-financing salaries above EUR 800,000 is available to large undertakings that meet the following criteria:
– preserving the employees’ jobs, for whom aid is granted, for the entire period of receiving funds;
– the amount of the aid cannot exceed 80% of the gross monthly salary per employee;
– granting aid only for those employees who would otherwise have been made redundant due to the suspension or decrease of operations as the consequence of the COVID-19 outbreak.
In addition, aid exceeding the maximum amount will also be made available to large companies who prove that the actual damages resulting from the COVID-19 outbreak actually exceeded the total among of salary compensation pursuant to the act. It is projected that the Government of the Republic of Slovenia will issue a decree with a more detailed instructions for the methodology of evaluating the damage, the criteria and procedure for granting public funds, but this kind of aid will have to be authorized beforehand by the European Commission.
However, the text of the #PKP1 amendment is not unequivocally clear whether and in what way the state aid is to be returned in cases in which the amount of contribution exemption exceeds EUR 800,000 and the company does not meet the aforementioned criteria. It is understanding that companies that determined they received state aid, but do not meet the criteria for its granting, must first inform FURS about this, which will then issue a decree regarding returning the state aid. Regarding this, the #PKP1 does project that default interest would start only after the deadline for returning it determined in the FURS decree, but this is in our opinion not in accordance with EU regulation on state aid (interest-free state financing could mean a new measure of state aid, which is not necessarily consistent with EU regulation on state aid).
This is problematic predominantly in terms of PIZ contribution exemptions for employees who are still working and in terms of the crisis allowance payment. Considering the fact that the PIZ contribution exemption and the obligation of paying the crisis allowance are automatic according to #PKP1 and are therefore not subject to the eligibility to state aid, the obligation of paying a crisis allowance will also stand if the company and its PIZ contribution exemption exceeds the threshold of EUR 800,000 and it would therefore have to return the state aid.
Here, we believe that it could constitute that part of the paid crisis allowance for employees reduces the amount of state aid received by the company, as in that case, the employers and actually transferring the PIZ exemption onto their employees.
6. HOW CAN AN EMPLOYER PROVE THEY HAVE EXERCISED THE AID FOR EMPLOYEES WHO WOULD OTHERWISE HAVE BEEN MADE REDUNDANT?
We believe that the condition of granting aid only for those employees who would have otherwise been made redundant due to the suspension or decrease of operations as a result of the COVID-19 outbreak is fulfilled if employees have been temporarily laid-off for business reasons that are the result of the COVID-19 outbreak. In that case, an employee is already furloughed by the employer in order to retain their employment position and the purpose of the institution of temporary lay-off pursuant to the ZDR-1 is already in accordance with the condition of retaining employment.
The question remains, however, as to how this will need to be demonstrated for employees who have been furloughed due to force majeure. On the other hand, we believe that employer probably will not be able to prove that had the country not exempted PIZ payments, the employees would have been made redundant.
7. HOW LONG WILL THE MEASURES FROM THE NEW #ANTICORONA PACKAGE APPLY?
The measures from the new #PKP1 generally apply from 13 March until 31 May 2020, wherein the act also foresees the option of a 30-day extension of the temporary measures, if the COVID-19 pandemic is no lifted by 15 May 2020.
The #PKP amendment expressly states that employers are exempt from paying all furloughed employees’ contributions and the retirement and disability insurance contributions (and are obligated to pay crisis allowance), while the measures are in force (see question no. 25).
8. WHO IS ENTITLED TO CLAIM COMPENSATION REIMBURSEMENT FOR THE SALARIES OF TEMPORARILY LAID-OFF EMPLOYEES?
Claiming compensation reimbursement for temporarily laid-off employees will be possible for employers who:
- Are temporarily unable to provide work due to the coronavirus; and
- Suffer a drop in income for more than 10% relative to 2019 – if the submitted annual accounts indicate otherwise, the entire received aid will need to be returned.
In the event that the company was not operating in 2019 i.e. in 2020, the assistance will be available for those employers who suffered:
- Over 10% decrease of average monthly income in 2020 relative to the average monthly income in 2019 or
- Over 10% decrease of the average monthly income in 2020 relative to the average monthly income in 2020 up until 12 March 2020.
Employers who have the status of a humanitarian organization or the status of a disability organization can apply for the salary compensation of furloughed employees, even if they do not meet the abovementioned criteria.
The right cannot be exercised by
- An indirect of direct spending authority, whose income share from public resources was higher than 70 percent in 2019,
- An employer whose main activities are finances or insurance, classified under group K according to the standard classification of activities and has over 10 employees as of 13 March 2020.
9. WHAT ABOUT THE EVENT OF A FORCE MAJEURE?
An absence due to force majeure equates the accompanying amount of salary compensation with the one received for a temporary lay-off; additionally, the compensation reimbursement for the reason of force majeure will 80% of the basic salary (no longer 50%).
Pursuant to #PKP1, compensation reimbursement for employees who are absent due to force majeure will be available to employers who meet the criteria for claiming compensation reimbursement for employees who have been temporarily laid-off, which was explained in the answer to question no. 3, and who also issue a statement that the employees are not performing the work due to force majeure, which is a consequence of their childcare obligations due to kindergartens and schools being closed and other objective reasons or due to their inability to travel to work due to the halted public transport or closed borders between neighbouring countries and that they receive salary compensation due to this.
The new act therefore actually defines the meaning of force majeure for the purposes of this regulation, i.e. absence due to childcare obligations as a result of closed kindergartens and schools and other objective reasons or the inability to travel to work due to halted public transport of closed borders between neighbouring countries.
10. WHAT ARE THE EMPLOYER’S INITIAL OBLIGATIONS TO QUALIFY FOR THE TEMPORARY MEASURES AS PER THE #ANTICORONA PACKAGE?
In addition to meeting the conditions stated in the answer to question no. 3, an employer cannot exercise the right to compensation reimbursement for salaries in the event that:
- The employer does not pay obligatory contributions and other financial and non-financial obligations collected by the tax authority, if the employer has unpaid due obligations on the day the application is submitted. It is also regarded that an employer does not meet the requirements from this indent if on the day the application was submitted he had not submitted all the tax returns for income from an employment relationship for the period of the past five years up to the day the application was submitted;
- An insolvency proceeding has been brought against him.
#PKP1 further states that an employer who receives or received funds must return the entirety of the funds if he launches a liquidation proceeding during the period:
- Of receiving the funds and
- After the period of receiving the funds that is equal to the period of receiving the funds.
An employer will also have to return the received funds along with the default interest if any profit appropriation, purchasing their own shares or their own business shares, business performance bonuses or management bonuses are awarded in the period from the act entering into force until the end of 2020. The #PKP1 amendment also provides that an employer who has applied for a salary compensation reimbursement and contribution exemption for temporarily laid-off employees will have to returned the received funds along with the accrued interest if there is any profit appropriation, purchasing own shares or business shares, business performance bonuses or management bonuses are awarded in 2020 or for the year 2020.
This limitation does not apply for those employers who will be exempt of PIZ contributions for employees who are working and who will pay the crisis allowance and for employers who will be applying for a compensation reimbursement for employees who are not working due to force majeure.
11. WHAT OBLIGATIONS DOES THE EMPLOYER HAVE DURING THE PERIOD OF COMPENSATION REIMBURSEMENT?
The employers have the following obligations during the period of receiving compensation reimbursement for employee salaries:
- Paying salary compensations (except the contributions),
- Ban on ordering overtime, if the work can be performed by temporarily laid-off employees,
- Prior informing of the Employment Office, if the employer orders the employee to return to the workplace or the day the absence has ended if the employee was absent due to force majeure.
If an employer does not meet these requirements, he will be obligated to return the received funds threefold.
12. IS AT LEAST 30% OF THE EMPLOYEES BEING TEMPORARILY LAID OFF A PRECONDITION TO CLAIMING COMPENSATION REIMBURSEMENT FOR EMPLOYEES WHO HAVE BEEN TEMPORARILY LAID-OFF DUE TO THE INABILITY TO PROVIDE WORK PURSUANT TO THE NEW #ANTICORONA PACKAGE?
13. ARE TERMINATION OPTIONS LIMITED?
The Act does not stipulate the expressed obligation by the employer to make a commitment not to terminate employees during the period of being included in the measure or for a certain period afterward at least to the amount of received aid up to EUR 800,000.
Explanations to the proposals of some articles do imply that employers are not to terminate during the time of being included in the measure, however, the text in the articles themselves does not contain this, so it seems these explanations related to older or working versions of the act that were not appropriately adjusted to the text of the act as it entered into force.
The act also stipulates that during the period of the temporary measures, the provisions of ZIUPPP do not apply, which leads to the conclusion that during the measures pursuant to #PKP1, there is no obligation of preserving employment and a ban on termination that had been projected by the ZIUPPP.
Here, we would like to warn that the condition of preserving employment is prescribed for the cases of large companies that apply for state aid exceeding EUR 800,000. Read more on this in questions. 2, 5 and 6.
14. WHAT ARE THE MAIN RIGHTS AND OBLIGATIONS OF AN EMPLOYEE WHO HAS BEEN TEMPORARILY LAID-OFF PURSUANT TO #PKP1? IS IT POSSIBLE TO ROTATE TEMPORARILY LAID-OFF EMPLOYEES?
An employee must be temporarily laid-off in writing. Here, it is regarded that the electronic form (e-mail) is equivalent to regular mail if the data is accessible in electronic form and is suitable for later use. The written lay-off must include the period of the temporary lay-off, the options and manner for ordering the employee to return to work prematurely and the amount of salary compensation.
During the temporary lay-off, the employee has the right (previously: obligation), to return to work at the request of the employer for up to seven days (previously: seven consecutive days) in a current month. Prior to their return to work, the employer must inform the Employment Office regarding this.
The change in the provision which omits the word “consecutive”, allows for the interpretation that an employee has the right to return to work for no more than 7 days in a current month. We believe this kind of interpretation is not in accordance with the purpose of this measure, nor does it stem from the general arrangement pursuant to the ZDR-1.
On the other hands, the changes to the provision could also be interpreted as still allowing for employees to be called to work to a greater extent, however if the employee were to return to work for more than 7 days, a new application would need to be submitted pursuant to this act. The act is not clear on this. We believe the act should be interpreted as allowing for rotations with no limit to the maximum number of days for which an employee is allowed to return to work in an individual month. We will be following the relevant institutions for any explanations regarding this and will be updating the article regularly.
15. DOES THE NEW #ANTICORONA PACKAGE PROJECT ANY LIMITATIONS FOR COMPENSATION REIMBURSEMENT FOR EMPLOYEES WHO HAVE BEEN TEMPORARILY LAID-OFF OR ABSENT DUE TO FORCE MAJEURE? IS IT POSSIBLE TO PAY HIGHER COMPENSATIONS?
The act stipulates that salary compensation for temporary lay-off and absence due to force majeure in the amount of 80% of the basic salary must not be lower than the minimum salary in the Republic of Slovenia. The employer is therefore limited only by the lowest possible amount, otherwise pays compensation normally in the amount of 80% of the basic salary as compensation calculation pursuant to the Employment Relationships Act for temporary lay-offs for business reasons.
It is important to note that the employer will be reimbursed for the compensation only up to the amount that does not exceed the average salary for 2019 in the Republic of Slovenia, calculated per month minus the insurance contributions.
If the employee’s salary had been lowered after being scheduled for a shorter work time by the employer, the basis for the salary compensation for the temporary lay-off is calculated from the last three months prior to being put on a shorter work time.
16. WHAT ABOUT CONTRIBUTION EXEMPTIONS FOR EMPLOYEES WHO HAVE BEEN TEMPORARILY LAID-OFF DUE TO FORCE MAJEURE?
The employer is exempt from paying contributions for employees who have been temporarily laid-off and for whom they are entitled to compensation reimbursement pursuant to this act, as well as for employees who are not working due to force majeure and are receiving salary compensation, for all social insurance from the salary compensation from 13 March to 31 May, but only to the amount of the salary compensation of an average salary for 2019. The state will therefore cover social insurance contributions for the employees, as well as the employer’s contributions up to the aforementioned amount.
In contrast, the employer is obligated to calculate and pay the accompanying taxes. The employer does have the option of asking for a deferral on the tax payment (including tax return). Read more on that here.
The act is not clear whether the employer will still be responsible for the difference in the contribution amount that will be covered by the state in the case a higher compensation is paid than the average salary for 2019.
17. WHAT IS THE PROCEDURE FOR CLAIMING COMPENSATION REIMBURSEMENT?
The employer will be able to exercise the right to compensation reimbursement with an application submitted electronically to the Employment Office of the Republic of Slovenia within 8 days of temporarily laying-off an employee, but no later than 31 May 2020.
Applications can also be submitted by employers who had temporarily laid off employees or whose employees were unable to perform work due to force majeure before this act entered into force, within 8 days or the act entering into force, if they meet all the conditions for exercising the rights pursuant to the act. In that case, an employer will be able to claim compensation reimbursement retroactively from 13 March 2020 onward.
The application must include:
- If applying for compensation reimbursement due to force majeure, a criminally and materially binding statement that the employees are not performing work due to force majeure as the result of childcare obligations due to kindergartens and schools being closed and other objective reasons or the inability to travel to work due to halted public transport or closed borders between neighbouring countries and that they are receiving salary compensation, and certificates of the employees’ justifiable absence due to force majeure as the result of childcare obligations due to kindergartens and schools being closed and other objective reasons or the inability to travel to work due to halted public transport or closed borders between;
- If applying for compensation reimbursement due to temporary lay-offs, a criminally and materially binding statement that the employer is temporarily unable to provide work as a result of the pandemic consequences and documentation of the employees temporary lay-off due to the temporary inability to ensure work for business reasons.
The Employment Office of the Republic of Slovenia will issue a decision on the application within 8 days.
18. WHAT CAN AN EMPLOYER FOR IF THEY HAVE MISSED THE DEADLINE TO SUBMIT THE APPLICATION?
The #PKP1 amendment extends the deadline for submitting the applications: employers who have temporarily furloughed the employees or whose employees were not working due to force majeure even before #PKP1 was passed, but who failed to submit the application for salary compensation (which was within 8 days from #PKP1 entering into force), can submit the application within 8 days of the amendment entering into force. The text of the amendment, however, does not indicate that an employer who had temporarily furloughed employees after #PKP1 was passed and missed the deadline for submitting the application (i.e. eight days from the employee furlough) has the same option.
19. HOW WILL APPLICATIONS THAT WERE SUBMITTED BEFORE THE #PKP1 AMENDMENT BE PROCESSED?
It is projected that processes that were launched based on the applications submitted before the amendment to #PKP1 was passed will be processed according to the original text of the act, unless the result of the process is more beneficial for the application under the provision of the amendment. The more beneficial solution is deemed to be the one that does not result in the process of returning state aid.
Here, it is not clear whether this rule will be able to be applied to meeting the additional criteria that a large undertaking must meet that received help in excess of EUR 800,000 (see question no. 2). Considering the fact that this limitation stems from the Temporary Framework, based on which the European Commission has approved the Slovenian aid-granting scheme, and from European legislation, related to state aid, we believe that this limitation will still need to be respected, but the amounts from before the #PKP1 amendment will be able to be applied to large companies, and solutions for any possible already granted amounts that exceed the stated maximum amount will be found in other exceptions allowed by EU legislation (e.g. de minimis aid (generally amounts up to EUR 200,000 in three business years), help for the reimbursement for damages due to the pandemic to the most affected companies, if the country passes additional regulation and the European Commission approves the e.g. pursuant to Article 107(2)(b) of the PDEU)).
20. WHEN WILL THE EMPLOYER RECEIVE THE COMPENSATION REIMBURSEMENT?
The compensation reimbursement will be paid monthly proportionately or in full on the 10th day of the month following the month for which compensation is being paid. The diction here is somewhat unclear and can be construed as being paid with a one-month delay. The month of the compensation reimbursement is the following month, meaning the month of May for work done in April. The 10th day of the month following the month of compensation could therefore be June.
21. WHAT WOULD BE THE AMOUNT OF COMPENSATION OF THE EMPLOYEE’S ABSENCE DUE TO FORCE MAJEURE (CHILDCARE, HALTED PUBLIC TRANSPORT), IF THE EMPLOYER DID NOT EXERCISE THE BENEFITS ACCORDING TO #PKP1? DOES A 50% COMPENSATION APPLY PURSUANT TO THE ZDR-1 OR 80% PURSUANT TO #PKP1?
#PKP1 equates the compensation for force majeure with the absence due to temporary lay-offs (80%).
We believe that in this case, #PKP1 applies as a special provision and that in the case of an absence due to force majeure related to childcare, halted public transport and closed borders during #PKP1 warrant an 80% compensation (and not 50% according to the ZDR-1).
The #PKP1 amendment expressly states that employees who are not working during the intervention measures being in force due to being temporarily laid-off or due to force majeure have the right to payment compensation pursuant to #PKP1 (i.e. 80% or at least in the amount of the minimum wage). The explanation of the amendment state that this also goes for employees whose employers will not be entitled to salary compensation.
22. WHAT IS THE RELATIONSHIP BETWEEN #PKP1 AND ZIUPPP?
#PKP1 does not annul the provisions of ZIUPPP, but it does project that the provision of the ZIUPPP regarding the right to partial compensation for employees who have been temporarily laid-off are not used during the implemented measures from the new #PKP1.
In practice, this means that compensation reimbursement for temporarily laid-off employees can be claimed from 13 March 2020 until the expiration of the temporary measures of the #PKP1 (projected until 31 May or 30 June 2020) per the provisions of #PKP1, while during the period after the expiration of the temporary measures per #PKP1, the compensation reimbursement will be claimed according to the provisions of the ZIUPPP.
23. WILL CLAIMING COMPENSATION REIMBURSEMENT FOR TEMPORARILY LAID-OFF EMPLOYEES PURSUANT TO THE ZIUPPP AND PURSUANT TO THE NEW #PKP1 REQUIRE SEPARATE APPLICATIONS?
No. The temporary measures pursuant to both regulations can be claimed with a single application to the Employment Office of the Republic of Slovenia. During the temporary measures from the new #PKP1, all of the applications for compensation reimbursement for temporarily laid-off employees will be processed according to the provisions of the new #PKP1, even if the application had been submitted pursuant to the provisions of the ZIUPPP in the period from 29 March 2020 to the enforcement of the new #PKP1.
24. HOW LONG CAN EMPLOYEES BE TEMPORARILY LAID-OFF FOR THE EMPLOYER TO QUALIFY FOR COMPENSATION REIMBURSEMENT?
Employees can be temporarily laid-off until no longer than 31 May 2020. If the pandemic is not lifted by 15 May 2020, the stated time period is prolonged by 30 days.
25. WHAT ABOUT EXEMPTIONS FOR CONTRIBUTIONS FOR EMPLOYEES WHO ARE WORKING? FOR WHAT PERIOD SHOULD A CRISIS ALLOWANCE BE PAID?
#PKP1 projects the partial exemption for contributions for employees in the private sector who are working and sets a crisis allowance. Qualifying for this measure does not require qualifying for the condition of decreased income in 2020. In addition, the PIZ contribution (which is also coupled with the obligation of paying a crisis allowance) will also apply to employers who distribute profits, buy their own share or business share and give business performance bonuses, as the #PKP1 amendment is exempt from the provision of Article 99 of the #PKP1.
The new act provides that employers are exempt from paying contributions for retirement and disability insurance while the measures are in force (i.e. from 13 March until 31 May, with an option of a 30-day extension). The measure of contribution exemption also applies for work in the period from 13 March until 31 May 2020, which includes the salary for March, which is paid in April.
The employer will still be obligated to cover contributions for health insurance, have unemployment and parental protection. The contribution for retirement and disability insurance is currently being covered entirely by the state. The #PKP1 amendment expressly provides that the employer is exempt from both paying the contribution for the insured person (the contribution is only calculated and deducted) and the payment of the employer’s contribution (the contribution is only calculated).
On the other hand, the employers pay each employee who is working and whose last monthly salary did not exceed 3 times the minimum wage (about EUR 2800 gross) a monthly crisis allowance in the amount of EUR 200 for each individual month along with the salary, which is exempt from all taxes and contributions. The crisis allowance is not included in the annual tax return. The crisis allowance for the month of March is paid proportionately from 13 March 2020 onward.
Direct and indirect state and municipal spending authorities and financial and insurance activities that fall under group K according to the standard classification of activities are not entitled to exemption of contributions for employees who are working and who have over 10 employees as of 13 March 2020.
An exemption of contributions also applies to those employees who are on vacation and are receiving a salary compensation or those who are on sick leave, which are borne by the employer. The employees are entitled to a crisis allowance only for the time in which they are actually working, not during their absence due to a temporary lay-off, vacation, or sick leave. The #PKP1 amendment provides that an employee is entitled to a crisis allowance for a holiday if they actually worked on that day. The act is somewhat unclear regarding this, as the crisis allowance is generally already only paid to employees who are actually working.
26. CAN AN EMPLOYER DECIDE NOT TO CLAIM EXEMPTION FROM CONTRIBUTIONS FOR EMPLOYEES WHO ARE WORKING? ARE ALL EMPLOYERS IN THE PRIVATE SECTOR OBLIGATED TO PAY A CRISIS ALLOWANCE?
The contribution exemption and obligation of paying a crisis allowance to employees who are working automatically apply to all employers in the private sector (except the listed exceptions for finance and insurance activities). Employers are therefore not just enabled to exercise their rights regarding the measure, but the measure applies automatically. In accordance with this, paying a crisis allowance is an obligation of all employers in the private sector and not just of those who will be applying for contribution exemptions.
The #PKP1 amendment exempts this measure from the limitations of Article 99 #PKP1, which means employers who will be distributing profits, buying their own shares or business shares and awarding business performance bonuses or management bonuses are also entitled to the PIZ contribution exemption and crisis allowance.
27. ARE EMPLOYEES WORKING FROM HOME ALSO ENTITLED TO CRISIS ALLOWANCE?
A crisis allowance must be paid to all employees regardless of whether they are working from home or in the employer’s premises and under the condition that their monthly gross salary did not exceed three times the minimum wage or about EUR 2800 gross.
28. WHAT ABOUT CONTRIBUTIONS FOR OCCUPATIONAL INSURANCE?
Pursuant to the #PKP1 amendment, employers who employ employees in position that require a mandatory occupational insurance are exempt from paying occupation insurance contributions from salaries or salary compensations during the period of the #PKP1 measures.
29. WHAT ABOUT COMPENSATIONS FOR ABSENCES DUE TO MEDICAL REASONS?
For employees who have been temporarily detained from work for health reasons from the day the act was enforced to the do za measures pursuant to the #PKP1 no longer apply, but no later than 31 May 2020, the compensation is covered by the health insurance office from the first day of the absence onward.