On 25 March 2020, the Government of Slovenia announced a EUR 2bln rescue package intended to mitigate the adverse and diverse effects of the COVID-19 pandemic. The package primarily seeks to maintain jobs by providing pay check support and tax relief to employers and introducing additional mechanisms to reduce the liquidity shock on businesses.
The package comes on top of the intervention legislation adopted earlier this month and introducing, inter alia, the possibility to apply for a 12-month loan repayment holiday and partial reimbursement of workers' salary compensation. This legislation is yet to enter into force and will likely be further tweaked by the anti-coronavirus relief package, once legislated (only the basic contours have been made public for now).
For businesses, the package puts forward various supporting schemes. These include:
- Full state coverage of all social security contributions plus additional 20 % co-financing of net salary compensation for:
- workers instructed by employers to stay at home; and
- workers who are unable to work due to force majeure (this includes instances of child care / workers unable to get to work)
[NB: It remains to be seen how these measures will be streamlined with the recently adopted intervention act (already) providing for 40 % reimbursement of salary compensation for workers instructed to stay at home (such measures are only available to employers that demonstrate their business was affected by the COVID-19 outbreak).]
- Full state coverage of pension contributions for employees who continue to work during the COVID-19 pandemic
- Immediate state coverage for workers' sick leave (default regime: first 30 working days of absence are covered by the employer)
- Creation of a guarantee scheme and possibility to purchase claims towards Slovenian companies to alleviate liquidity issues [NB: details on these mechanisms not yet available]
- Suspension of corporate income tax pre-payment
- Reduction of payment deadlines to eight days for all state-funded supplies from the private sector
- Suspension of contractual penalties for delays in deliveries to the public sector
Various other measures are proposed, including temporary grant payments and suspension of social contributions for freelancers / self-employed persons affected by the economic fallout, a one-time solidarity check for pensioners with monthly pensions below EUR 700, and a special rescue package targeting farmers.
By way of a (soft/non-mandatory) recommendation, businesses are encouraged to adopt an incentive mechanism on similar terms as applicable in the public sector (a salary bonus range of 10–200 % depending on exposure to / involvement in combating the pandemic).
The measures – which are pending legislation and (generally) an eight-day waiting period before entry into force – are expected to last until 31 May 2020, but may be extended if circumstances so require.
By Ursa Usenicnik, Associate, and Marko Frantar, Attorney at Law in cooperation with Schoenherr