Anti-crisis shield from employers’ perspective
The Act Amending the Act on Special Measures for the Prevention, Control and Management of COVID-19, Other Infectious Diseases and the Resulting Crisis Situations, and Certain Other Acts, dated 31 March 2020 (Journal of Laws of 2020, item 568) and the Act on Special Support Instruments in Connection with the Spread of the SARS-CoV-2 Virus, dated 16 April 2020 (Journal of Laws of 2020, item 695), are parts of the so-called Anti-Crisis Shield intended to support businesses affected by the COVID-19 epidemic.
The following solutions are significant from an employers’ perspective:
Salary subsidies from the Guaranteed Employee Benefits Fund (FGŚP) in case of economic downtime
- A business which has experienced a decline in turnover attributable to COVID-19 may apply for a salary subsidy from the Guaranteed Employee Benefits Fund for its workers affected by economic downtime. This subsidy is available regardless of the size of the enterprise.
- The subsidy will cover not only employees working based on contracts of employment, but also individuals working under outwork contracts, service contracts (umowa zlecenie) and other agreements for provision of services to which the regulations on service contracts apply accordingly. However, businesses cannot apply for subsidies for the remuneration of the so-called self-employed, i.e. individuals working with them on the basis of B2B agreements for the provision of services.
- The condition for eligibility is a decline in turnover, understood as a decrease (in terms of volume or value) in the sales of goods or services by at least 15% when comparing two consecutive calendar months in 2020 to the same period in 2019, or by at least 25% based on a month-to-month change in 2020.
- The subsidy may be paid during economic downtime due to COVID-19 for a maximum of 3 months, starting from the month of the application (with an option for the Council of Ministers to extend this period).
- Economic downtime means that workers remain on standby but do not work for reasons not attributable to them. Economic downtime does not need to affect the entire business and may concern individual groups of workers.
- The rules for taking economic downtime should be laid down in an agreement between the employer and the trade unions (or workers’ representatives if there are no trade unions in the company). The agreement is one of the necessary conditions for taking economic downtime and making the related salary reductions. If the trade unions or workers’ representatives do not agree to enter into such agreement, it will be impossible for the company to take economic downtime and thus to apply for the subsidy.
- During economic downtime, the employer pays reduced salaries to his workers. A salary may be reduced by 50%, however, it may not be lower than the national minimum salary, taking into account the worker’s working time (currently PLN 2,600 gross for full-time employment).
- The employer may apply for a salary subsidy for every worker affected by economic downtime. In this case, the subsidy will amount to 50% of the national minimum salary, taking into account the working time, plus the social security contributions payable by the employer on the subsidy amount. Therefore, the salary subsidy for a full-time worker will be PLN 1,300 + social security contributions (PLN 233.09). In the case of part-time workers, the subsidy amount is adjusted accordingly.
- The subsidies may not be obtained for higher-earning workers, i.e. those whose remuneration in the month preceding the date of filing the application was higher than 300% of the average monthly salary from the previous quarter as announced by the Central Statistical Office (GUS). Currently, workers earning over PLN 15,595.74 gross are excluded from the subsidy.
- The subsidies are intended to protect jobs. Therefore, the employers using this form of assistance will not be allowed to terminate their contracts with the relevant workers for reasons not attributable to the workers during the period of the subsidy. This means that the possibility of employment restructuring may be blocked for a maximum of 3 months (i.e. the 3 months when the subsidy is received).
Salary subsidies from the FGŚP in case of reduction of working hours
- Businesses may also apply for a subsidy from the Guaranteed Employee Benefits Fund for salaries of workers with reduced working hours.
- The terms of the subsidy are the same as in the case of subsidies for economic downtime, i.e. a decline in turnover (by minimum of 15% or 25%, as the case may be) attributable to COVID-19, conclusion of an agreement with trade unions/workers’ representatives, maximum subsidy period of 3 months, restrictions on dismissal of employees for the subsidy period.
- Employers suffering a decrease in turnover may reduce their workers’ working hours by a maximum of 20%, however to not less than 0.5 FTE.
- As a result of working hours reduction, salaries will also be reduced on a pro-rata basis, however, they may not be lower than the national minimum salary taking into account the working time (in the case of full-time jobs, if the working hours are reduced by 20%, the salary may not be lower than PLN 2,080 gross).
- In this case, the subsidy amounts to 50% of the reduced salary, but not more than 40% of the average monthly salary from the previous quarter as announced by the Central Statistical Office (GUS), applicable as at the date of submitting the subsidy application (currently PLN 2,079) plus social security contributions (PLN 373.27).
- Similarly as in the case of economic downtime, the subsidy cannot be obtained for workers earning over 15,595.74 PLN gross.
Salary subsidies from the Labour Fund
- A company that has experienced a drop in economic turnover as a result of COVID-19 may apply for a subsidy for salaries and social security contributions on the basis of an agreement concluded with the competent district governor (starosta). This subsidy will be financed from the Labour Fund. It should be noted that while all employers can apply for subsidies from the FGŚP, subsidies from the Labour Fund are available only to micro, small and medium-sized businesses.
- The subsidy amounts differ depending on the level of decrease in turnover. If the drop is of a least:
- 30% – the subsidy will amount to 50% of the salaries of all workers included in the application plus the respective social security contributions, however not more than 50% of the national minimum salary (i.e. PLN 1,300) plus social security contributions due from the employer for each employee;
- 50% – the subsidy will amount to 70% of the salaries of all workers included in the application plus the respective social security contributions, however not more than 70% of the national minimum salary (i.e. PLN 1,820), plus social security contributions due from the employer for each employee;
- 80% – the subsidy will amount to 90% of the salaries of all workers included in the application plus the respective social security contributions, however not more than 90% of the national minimum salary (i.e. PLN 2,340), plus social security contributions due from the employer for each employee.
- The decline in turnover is calculated as the ratio of the total turnover during any two consecutive calendar months after 1 January 2020 to the corresponding two consecutive months in the previous year.
- The subsidy is granted for salaries of employees, remuneration of individuals working under outwork contracts, service contracts (umowa zlecenie) or other agreements for provision of services.
- The subsidy will be granted for up to 3 months from the month of application and will be paid monthly on the basis of an agreement with the competent district governor.
- The application for subsidy must be submitted to the District Labour Office (powiatowy urząd pracy) competent for the place of the company’s business within 14 days of the application opening date.
- Employers using this aid must retain the workers covered by the subsidy agreement for the subsidy period, otherwise they will be required to return the subsidy.
- A business may not receive the subsidy in the part where the same costs have been or will be financed from other public funds, therefore a subsidy from the Labour Fund may not be applied for if the employer has obtained a subsidy from FGŚP in respect of the same workers.
More flexible working time and changes in employment conditions
- Employers facing a drop in turnover as a result of COVID-19, and not being in arrears with ZUS contributions or taxes may reduce an uninterrupted rest break in a 24-hour period from at least 11 hours to no less than 8 hours, and an uninterrupted weekly rest break from at least 35 hours to no less than 32 hours.
- In addition, by way of agreement with trade unions or, in the absence of trade unions, with employee representatives, employers (facing a decline in turnover) may introduce solutions to make working time and employment conditions more flexible.
- The agreement may relate to:
- introducing an equivalent working time system which allows daily working time to be extended, but no more than up to 12 hours in a settlement period not exceeding 12 months (with the extended daily working time being then counterbalanced by a shorter daily working time on certain days or by non-working days);
- applying less favourable employment conditions for employees than those arising from employment contracts concluded with these employees.
- A copy of the agreement should be forwarded by the employer to the competent regional labour inspector within 5 business days of its conclusion.
- The above forms of flexibility in working time and changes in employment conditions may be applied if there has beena decline in economic turnover, understood as a decrease in the sales of goods or services (in quantity or value), as a result of COVIS-19 by at least 15% when comparing two consecutive calendar months in 2020 to the corresponding period in 2019, or by at least 25% based on a month-to-month change in 2020.
Deferral of payment of income tax advances
- The obligation to pay advances on revenue earned under labour, employment, outworking or cooperative employment relationships, advances on social security cash benefits and services performed under a service contract or contract for specific work, as well as advances on copyright and related rights collected in March and April 2020 has been deferred until 1 June 2020, provided that payers have found themselves in economic difficulty due to COVID-19.
Suspension of medical examinations
- Periodic medical examinations for employees have been temporarily suspended and need to be performed within no more than 60 days of the state of epidemic threat and state of epidemic being cancelled.
- Preliminary and follow-up medical examinations may be performed both by a doctor other than an occupational health physician and remotely.
- During the state of epidemic threat and state of epidemic, and for the next 60 days after cancellation thereof, the validity of preliminary, follow-up, periodic medical examinations, which expired after 7 March 2020, is extended.
Occupational Health & Safety Training
- Initial OHS training may be performed entirely via electronic means of communication, one exception being workplace training for certain employee groups (e.g. blue-collar workers).
- The time limit for periodic OHS training has been extended: if the training is to be held during a state of epidemic threat/state of epidemic or within 30 days from revocation thereof, the training will be postponed until the 60th day from the revocation.
- Persons running business activity (self-employed) and employed under a civil law contract may apply to ZUS fora downtime payment if such business activity or contract is their only social security title. The payment will be financed by the Labour Fund.
- The downtime payment may be applied for by persons running non-agricultural business activity or ordering parties with whom a civil law contract has been concluded, facing economic downtime as a result of COVID-19.
- The downtime payment may be granted to persons running business activity which has been suspended after 31 January 2020 and, if no suspension has occurred, to those who have faced at least a 15% decline in revenue in the month immediately preceding the month of the application compared to the revenue earned in the preceding month. The downtime payment may only be granted to persons who launched their business activity before 1 February 2020.
- Persons working under a civil law contract may apply for the downtime payment if the contract was concluded before1 April 2020.
- In the case of a civil law contract no downtime payment may be granted if the applicant’s revenue in the month preceding application exceeded three times the average monthly remuneration from the previous quarter (PLN 15,595.74 gross at present). This restriction is not applicable to people conducting non-agricultural business activity.
- One-time payment, as a rule, amounts to 80% of the national minimum remuneration, i.e. PLN 2,080, and is non-pensionable and non-taxable.
- The downtime payment for persons running business activity subject to lump sum taxation is PLN 1,300.
- In the case of persons employed under civil law contracts, if the sum of their revenue earned under civil law contracts from the month preceding application is less than PLN 1,300, the downtime payment is equal to the total remuneration for the performance of the civil law contracts.
- The downtime payment may be paid again, but not more than on 3 occasions.
One-time loan for micro businesses
- Micro businesses (employing less than 10 employees and achieving an annual net turnover of no more than EUR 2 million) that began their activity before 1 March 2020 may apply to the county labour office for a one-time loan (up to PLN 5,000) to cover current operating costs.
- The loan is granted by the Labour Fund under a contract concluded with the district governor. Applications may be submitted once the head of the county labour office opens the application window.
- The loan is granted for no more than 12 months, with a grace period for payment of capital together with interest being 3 months from the date of granting the loan.
- If the business continues to operate for 3 months from the date of granting the loan, the loan together with interest may be cancelled upon request. In such a case, revenue from the cancellation of the loan will not constitute revenue within the meaning of tax law.
Exemption from payment of social security contributions
- Undertakings reporting less than 10 insured persons (the entrepreneur plus 9 employees) to ZUS may apply to ZUS for exemption from the obligation to pay the entire amount of the contributions due for the period from 1 March 2020 to 31 May 2020. This also applies to the self-employed whose revenue does not exceed PLN 15,681 gross (three times the average remuneration).
- Undertakings reporting 10 to 49 insured persons may apply to ZUS for exemption from the obligation to pay 50% of the contributions due for the period from 1 March 2020 to 31 May 2020.
- The number of persons reported for insurance by the remitter of contributions is determined based on when the insured were reported for social insurance:
- before 1 February 2020 and as at 29 February 2020;
- between 1 and 29 February 2020 and as at 31 March 2020;
- between 1 and 31 March 2020 and as at 30 April 2020.
- Exemption from ZUS contributions does not apply to undertakings that found themselves in difficulty in December 2019 and failed to settle their accounts, including ZUS contributions.
Stay and employment of foreigners
- The validity of documents legalizing foreigners’ stay in Poland has been extended. If the validity of a stay permit, visa-free stay period, national visa or a Schengen visa expires during the state of epidemic threat or state of epidemic, the validity period is extended to the 30th day following cancellation thereof. In this case, foreigners’ stay in Poland is still legal and there is no need to obtain additional documents in this respect.
- The period of foreigners’ work in Poland under a single stay and work permit, work permit, seasonal work permit ora declaration of entrusting work to a foreigner has also been extended. As in the case of documents legalizing a stay, if a stay and work permit, work permit (including seasonal work) or a declaration of entrusting work expire during the state of epidemic threat or state of epidemic, the validity period is extended to the 30th day following the revocation of the later of such states.
Temporary abolition of the deferment fee in respect of ZUS contributions
- Undertakings do not have to pay the deferment fee for payment of ZUS contributions or taxes in instalments or deferment thereof (social security, health insurance, Labour Fund, Guaranteed Employee Benefits Fund and Temporary Retirement Fund contributions, default interest, enforcement costs, reminder costs and an additional fee) due for the period from 1 January 2020, provided that such payment in instalments or deferment is requested during the state of epidemic threat/state of epidemic, or within 30 days following cancellation thereof.
Extension of time limits for concluding PPK management and maintenance contracts
- Employers covered by the Employee Capital Plans Act from 1 January 2020 are subject to an extended time limit for entering in PPK contracts. Thus, a PPK management contract should be concluded by 27 October 2020 and a PPK maintenance contract – by 10 November 2020.
- This extension applies solely to employers covered by the second PPK implementation stage, i.e. those employing at least 50 employees on 30 June 2019.
Funding for employers of persons with disabilities
- Undertakings employing persons with disabilities will obtaina higher funding for worker remunerations, which will be paid from April 2020.
- Funding for persons with severe disabilities will be increased to PLN 1,950, and for those with moderate disabilities – to PLN 1,200.
- In case of persons diagnosed with a mental illness, mental retardation, a pervasive developmental disorder, epilepsy or the blind, undertakings will obtain an additional funding of: PLN 1,200 for persons with severe disabilities, PLN 900 for those with moderate disabilities and PLN 600 – for those with mild disabilities.
Attorney at Law, Partner, Head of Labor Law Practice
T: +48 660 765 903