7 frequently asked questions in connection with measures in the area of employment and labor law
The Slovak government regularly adopts measures in the area of employment and labor law with the aim to mitigate negative impacts of the extraordinary situation caused by COVID-19. Please find below seven most frequently asked questions that our clients address to us in this regard.
Following the amendment to the Labor Code (effective as of April 4, 2020) and the adopted Employment Support Project (the “Framework”), we present you the seven most frequently asked questions that our clients address to us regarding labor law and government measures aimed to support the employment.
1. Is an undertaking classified as a “large enterprise“ within the meaning of Annex no. 1 of the Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty entitled to request aid under the Framework?
Yes, an employer classified as a large enterprise may also apply for the aid. The Framework does not include conditions which would impose any restrictions in relation to the size of the employer.
2. May a legal entity simultaneously request for a combination of aid under Measure 1 (financial compensation to cover wage costs of employers bound by the duty to close or restrict their business operations by virtue of the decision of the PHA) and Measure 2 (financial compensation for decrease of sales)?
No, the current wording of the conditions of the Framework excludes the cumulation of the aid. However, the conditions are under development and upon release of the conditions for Measure 2, the situation might change.
3. What is the maximum amount of financial compensation to cover the wage costs of employees under the Framework?
According to the initial draft conditions of the Framework the maximum amount was limited to EUR 200,000/per month up to EUR 800,000 for entire duration of the term when the aid is provided.
On 8 April 2020, the maximum amount of aid per month set as EUR 200,000 was lifted.
Most recently, on 14 April 2020 the government lifted the maximum amount of EUR 800,000 per one applicant for the entire duration of the term when the aid is provided.
4. Is it possible to apply for the aid to cover the wage costs of employees who are on holiday or working under the special working time arrangement (flexi account of working time agreed with trade unions; “flexikonto”)?
No, it is not possible yet.
Currently, the employers may apply only for the aid under Measure 1 of the Framework. Measure 1 is aimed at such employers, who are bound by the duty to interrupt or restrict their business operations by virtue of the decision of the Public Health Authority of the Slovak Republic („PHA“); These subsidies are aimed at compensation of wage of employees, to whom the employer may not allocate work due to an obstacle on the part of the employer (Section 142 of the Labor Code).
On 14 April 2020, the government adopted a revision of the conditions of the Framework and introduced the new Measure 3, which is aimed at employers, whose sales decreased as a result of the extraordinary situation and are not bound by the duty to interrupt or restrict their business operations by virtue of the decision of the PHA.
Such employers may choose from the following options:
- a subsidy for payment of the employee's wage compensation amounting to 80 % of his / her average earnings, up to a maximum of EUR 880 (applicable to such employees, to whom the employer may not allocate work due to an obstacle on the part of the employer under Section 142 of the Labor Code); or
- a subsidy to cover part of the wage costs for each employee in the amount depending on the decrease of sales in the amount according to the tables under Measure 2 (Measure 2 is intended for self-employed persons who are not employers).
5. Is it possible request aid for employees on CFM or sick leave due to the quarantine measures or school closures?
No, it is not possible. The subsidies are not available for the employees receiving social security benefits (sick leave, CFM).
6. Is the amendment of the Labour Code connected with conditions of promotion of employment? Who pays 80 % of wages? The state?
The amendment of Labour Code in question only sets forth the amount of employee’s wage compensation in case of obstacles to work on the side of the employer during an extraordinary situation (if there is no agreement between an employer and employees’ representatives).
The amendment of the Labour Code does not automatically constitute an entitlement to subsidies aimed to support the employment under the Framework.
The maximum amount of subsidy for employees’ wages is limited by the amount of wage compensation in case of obstacles to work on the side of the employer determined in the Labour Code. If an employer provided a wage compensation to an employee that exceeded 80 % of their average earnings, the remuneration for such period shall consist only of 80 % of their average earnings, up to EUR 1100.
7. For what period the decrease of sales is assessed? What period is assessed if we meet the conditions for aid, but we started our business just this year?
In general, the decrease of sales is assessed according to the same period in 2019. In case of an applicant not performing business activities in such period, the decrease in sales is assessed according to February 2020.
Under the conditions of Measure 2, dated 8 April 2020, every applicant can choose from the following options:
- Sales of the same month of the previous year are compared (e.g. period of March 2020 is assessed according to March 2019), or
- Average sales generated during the entire year 2019 are compared (can only be used in case of applicants performing business activities during the whole year 2019), or
- Sales of February 2020 are compared (can only be used in case of applicants who only performed business activities only during part of 2019 or stared their business on 1 February 2020 at the latest).