Covid-19 – Solutions for Employers

Covid-19 – Solutions for Employers

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Lower Salaries and Reduced Working Time

The Covid-19 Act offers a range of solutions for employers struggling due to a decrease in turnover as a consequence of the epidemic. To be eligible for support, businesses have to demonstrate a drop of at least:

  • 15%, calculated by comparing turnover generated over any two consecutive months in 2020 with
    the corresponding period of the previous year; or
  • 25%, calculated by comparing turnover generated in any month of 2020 with the previous month.

Employers may:

  • lower the salaries of employees who cannot work due to businesses having been forced to temporarily cease operations, by up to 50% (with the proviso that salaries cannot fall below a minimum wage calculated proportionately to their working time);
  • reduce employees’ working time by 20% (with the proviso that employees still have to work at least 50% of full working time), in which case employees are entitled to at least a minimum wage calculated proportionately to their working time.

Such changes need to be consulted with trade unions or official employee representatives. Employers should also provide regional labour inspectors with documents specifying which employees are to be affected, to what extent, and for how long.

Subsidies from Guaranteed Employee Benefits Fund

Employers who have implemented the above solutions may apply for subsidies, which can cover up to:

  • 50% of the minimum wage in the case of businesses whose operations have been brought to a halt;
  • 50% of the employee’s salary (with the stipulation that the subsidy cannot exceed 40% of the previous quarter’s average monthly salary) in the case of businesses that have been forced to reduce employee working time.

In either case, subsidies do not apply to employees whose salary for the previous month was higher than 300% of the previous quarter average monthly salary. Employers who are behind with payment of any taxes or statutory contributions (for example, social security or health insurance contributions), as well as those on the verge of bankruptcy, will not be subsidised. Subsidies are granted for a period of up to 3 months, and employers cannot simultaneously receive more than one type of public aid to cover the same salary.

Flexible Working Hours and Minimum Rest Periods

In order to ensure the survival of their businesses, employers struggling due to a decrease in turnover as a consequence of the epidemic may temporarily:

  • introduce a ‘system of equivalence’ allowing them to vary the length of a working day so that employees may be required to work up to 12 hours a day, which is then balanced by shorter working days;
  • reduce uninterrupted rest periods to 8 hours per day and 32 hours per week;
  • implement even less favourable employment conditions upon consultation with trade unions or official employee representatives.

By Piotr Bobrowski, Senior AssociatePenteris