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15 July 2020
Exemption from social security contributions
Downtime relief payment
Reduced working time
Shield 4.0 subsidy for employees previously ineligible for downtime or reduced working time
Material increase in payroll funds under Shield 4.0
Reconciliation of GEBF funding under Shield 4.0
Time of work
Employment of foreigners
Foreigners' right of residence
Remote work under Shield 4.0
Additional childcare allowance under Shield 4.0
Overdue holiday leave under Shield 4.0
Reduced severance pay under Shield 4.0
Non-compete agreements after termination of employment under Shield 4.0
Company social benefits funds under Shield 4.0
Financial assistance for CEOs under Shield 2.0
Suspension of periodic medical check-ups
Extended validity of medical check-ups
Loans to microenterpreneurs under Shield 2.0
In response to the COVID-19 pandemic, the government introduced a package of measures known as the 'anti-crisis shield'. This article summarises the employment-related measures offered under the different versions of the anti-crisis shield relief packages – so-called 'Shield 1.0', 'Shield 2.0', 'Shield 3.0' and 'Shield 4.0'.
The anti-crisis shield originally included an exemption from the obligation to pay social security contributions for:
Shield 2.0 expanded the group eligible for the three-month exemption from social security contributions payable for the period from 1 March 2020 to 31 May 2020 by including employers which had between 10 and 49 employees registered for the purposes of social security as at 29 February 2020. The exemption covers 50% of the aggregate amount of unpaid contributions reported in the social security statement filed for the relevant month.
The exemption constitutes state aid to remedy serious disturbances in the economy pursuant to the EU Commission Communication – Temporary Framework for State Aid Measures to Support the Economy in the Current COVID-19 Outbreak (2020/C 91 I/01). It enables entrepreneurs to apply for state aid on such grounds up to €800,000.
Shield 3.0 expanded the group eligible for the exemption from social security contributions by including beneficiaries of the so-called 'start-up relief' that were operating their business prior to 1 April 2020. Employers can benefit from the exemption from social security contributions due for April 2020 and May 2020 if their revenue generated in the first month for which the application is being submitted was no higher than 300% of the forecast average monthly gross salary in 2020 (currently approximately Zl15,500). An exemption application may also be submitted if the revenues generated in the month for which the application is being submitted exceeded 300% of the average gross salary but the income in that month was no higher than Zl7,000.
Shield 3.0 also modified the rules for applications for the exemption from social security contributions by sole traders (ie, self-employed individuals) whose social security contributions cover solely their own social security or health insurance. Following the amendment, the exemption was also available to sole traders if their revenue generated in the first month for which the application was submitted was higher than 300% of the forecast average gross remuneration in 2020 but their income was no higher than Zl7,000.
In the event of economic downtime due to COVID-19, employers can – on the conclusion of an agreement with the trade unions or employee representatives – reduce employees' wages or salaries. Wages or salaries may be reduced by up to 50% but cannot be lower than the minimum wage, taking into account the working time. The downtime relief payment may be subsidised by the Guaranteed Employee Benefits Fund (GEBF) up to 50% of the minimum wage taking into account the working time. Employees whose pay in the month preceding the submission of the subsidy application was higher than 300% of the country's average monthly salary for the previous quarter, as published by the president of the Central Statistical Office, effective on the application submission date, are not eligible for the subsidy.
Under Shield 2.0, employers must keep the subsidised employees employed only over the period for which the GEBF subsidy has been received (ie, up to three months).
Under Shield 2.0, entrepreneurs and contract workers can apply three times for a downtime relief payment. The downtime relief payment can be reapplied for in the month following the month in which it was received for the first time, providing that the applicant's statement confirms that their financial standing has seen no improvement.
Contract workers (ie, those engaged under service contracts) may apply for a downtime relief payment if their service contract had been concluded prior to 1 April 2020 (before the amendment, it had to have been concluded prior to 1 February 2020).
Further, Shield 2.0 removed the revenue-based eligibility cut-off point (which was previously 300% of the country's average monthly salary for the previous quarter, as published by the president of the Central Statistical Office) that enables sole traders (ie, self-employed individuals) and those who suspended their business operations after 31 January 2020 to apply for downtime relief. The revenue-base eligibility cut-off point was retained for contract workers applying for
a downtime relief payment.
The downtime relief payment is also available to those who launched their business prior to 1 April 2020 (previously, the requirement was to have operated a business prior to 1 February 2020).
Shield 4.0 allows contractors to directly submit an application for downtime relief payment if the principal refuses to act as an intermediary in submitting the application to the Social Insurance Institution. If a contractor makes a false statement as to a principal's refusal to submit an application, they will be criminally liable.
If an employer's turnover drops by at least 15% as a result of COVID-19, they can – having concluded an agreement with the trade unions or employee representatives – reduce employees' working time by up to 20% but no more than 50% of the full-time equivalent. The GEBF may subsidise up to 50% of the wages or salaries of employees affected by the working time reduction, providing that the subsidy does not exceed 40% of the country's average monthly salary for the previous quarter, as published by the president of the Central Statistical Office. Employees whose pay in the month preceding the submission of the subsidy application was higher than 300% of the country's average monthly salary for the previous quarter, as published by the president of the Central Statistical Office, effective on the application submission date, are not eligible for the subsidy.
Under Shield 2.0, employers must keep the subsidised employees employed only over the period for which the GEBF subsidy has been received (ie, up to 3 months).
Employers that have experienced a reduction in turnover due to COVID-19 may apply for a subsidy to pay the wages or salaries of employees who are ineligible for regular downtime, economic downtime or reduced working time. The subsidy covers up to 50% of the employee's wages or salary but no more than 40% of the average monthly salary in the previous quarter applicable on the date of the application's submission and includes social security contributions payable on the subsidy granted. The subsidy is available over three months. During the subsidy period, employees enjoy employment protection.
Employers that have experienced a material increase in their payroll fund because of a reduction in revenues from the sale of goods or services can:
A 'material increase in the payroll fund' is defined as an increase by at least 5% in the ratio of payroll costs (including social security contributions) to revenues from the sale of goods or services in the designated calendar month starting from 1 March 2020 against the month preceding the base month. The above arrangements can be applied for up to 12 months from the lifting of the state of epidemic emergency or the state of epidemic, depending on changes in the ratio of payroll costs to revenues. The reduction of the working time and introduction of economic downtime requires an agreement with employee representatives.
Shield 4.0 has specified the stages of reconciliation of GEBF funding. The first stage includes a preliminary verification of the reconciliation of the funds received and the documentation substantiating the application of the funds for the intended purpose (ie, an examination of the completeness and correctness of the statements submitted and verification of the amounts transferred and actually applied). The first stage of the audit is carried out within 60 days from the date of submission of the reconciliation statement. The second stage of the audit includes the final verification of the full documentation substantiating the application of the funds, which can occur within three years from the date of expiry of the deadline for submitting the reconciliation statement.
The anti-crisis shield loosened the rules for establishing the system and the distribution of working time and daily and weekly rest periods for certain employers, on conclusion of an agreement with the trade unions or employee representatives. In addition, the parties may conclude an agreement regarding terms of employment that are less advantageous than as stipulated in the employee's employment contract.
The anti-crisis shield has increased the amounts free from deductions for employees who, as a result of the COVID-19 outbreak, have had their pay reduced or whose family member has lost their source of income. Amounts free from deductions have been increased by 25% for each family member who earns no income and is dependent on the employee.
The terms and conditions of work performed by foreigners can be amended without the need to:
The validity of residence cards of an EU family member, documents evidencing the right of permanent residence and permanent residence cards of an EU citizen's family, whose validity expired during the state of epidemic threat, has been extended. Such documents will remain valid for 30 days from the date on which the state of epidemic threat is lifted.
The regulations regarding remote work have been clarified. Remote work can be performed if:
Employers must provide the tools and materials necessary to perform remote work and are responsible for providing the related logistic services. Employees may use their own tools or materials to perform remote work only if they can ensure adequate security and protection of personal data and business secrets. At their employer's instructions, employees must keep records of the activities performed (ie, a description of the activities and the date and time of performance).
Shield 4.0 has extended the period of availability of an additional childcare allowance on account of providing personal childcare due to the closing of a nursery, children's club or school until 28 June 2020.
During the state of epidemic emergency or the state of epidemic, employers can grant their employees overdue holiday leave of up to 30 days. This does not require employee consent. Leave may be granted regardless of the leave schedule, within the period specified by the employer.
If there is a reduction in business turnover or a material increase in the payroll fund due to COVID-19, severance pay, compensation or other cash benefits payable by employers to employees on termination of their employment contract can be reduced. Under the new regulations, severance pay cannot exceed 10 times the minimum wage. The restriction also applies to severance pay payable on termination of a contract of mandate or a service contract if the contract provides for such severance pay.
During the state of epidemic emergency or the state of epidemic, after the termination of an employment relationship, parties to non-compete agreements can terminate such agreements with seven days' notice. The right also applies to non-compete agreements after the termination of an employment relationship, agency contracts, contracts of mandate, specific-task contracts and other service contracts.
Employers that have experienced a reduction in turnover or a material increase in their payroll fund due to COVID-19 may suspend their obligation to:
Shield 2.0 allowed CEOs of small and medium-sized enterprises as well as self-employed individuals operating as sole traders who have no employees to apply for financial relief from the Labour Fund, starting from the month in which the application has been filed (prior to the amendment, the subsidy was granted from the day of the application). Entities that apply for Labour Fund relief must keep the subsidised employees employed (sole traders with no employees must continue their business operations) only over the period in which the subsidy is received.
The anti-crisis shield suspended the obligation to undergo periodic medical check-ups requested by employers as the 'state of epidemic threat' or the 'state of epidemic' continues.
The medical certificates issued as part of the preliminary, periodic and follow-up medical check-ups expiring after 7 March 2020 continue to be valid until the expiry of 60 days from the lifting of the 'state of epidemic threat' or the 'state of epidemic'.
Shield 2.0 extended the group of microentrepreneurs eligible for a loan by including entities with no employees, having removed the requirement for microentrepreneurs to maintain the headcount
as of 29 February 2020. To qualify for loan forgiveness, microentrepreneurs must continue their operations for three months after the date on which the loan is granted.
Microentrepreneurs who launched their business prior to 1 April 2020 are eligible to apply for a one-off loan (previously, the business had to have been launched prior to 1 March 2020).
For further information on this topic please contact Agnieszka Fedor at Soltysiński Kawecki & Szlęzak by telephone (+48 22 608 7000) or email (firstname.lastname@example.org). The Sołtysiński Kawecki & Szlęzak website can be accessed at www.skslegal.pl.
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