Anti-Crisis Shield – Salary Subsidy Scheme
Current as of 23 March 2020 (draft Amendment to the Act on Special Arrangements for the Prevention, Control and Management of COVID‑19, Other Infectious Diseases and the Resulting Emergencies, and Certain Other Acts, the “Bill”)
Consultations are ongoing on draft new regulations to introduce anti-crisis shield solutions.
Many employers are eagerly anticipating the details of the announced salary subsidy scheme. Below we present a summary of the key assumptions of the proposed solutions.
In what situations will the subsidies be available?
According to the Bill, a company may apply for subsidies for the salaries of employees affected by economic downtime or reduced working hours following the occurrence of COVID-19. The subsidies are to be financed by the Guaranteed Employee Benefits Fund (FGŚP).
Economic downtime is a period when employees are on standby, but do not actually work for reasons not attributable to them (when it is impossible to work, e.g. due to a forced restriction of shopping centre operation).
Reduced working time means that the employer reduces the working time of an employee as compared to the contractually agreed time for reasons not attributable to the employee.
Economic downtime – subsidy rules
Based on the draft regulations, in the period of economic downtime arising from coronavirus employers may pay employees a reduced salary (such reduction being not greater than 50%), however such salary may not be lower than the national minimum salary (currently PLN 2,600 gross) taking into account the working time. In such a case, the salary subsidy from FGŚP may amount up to 50% of the minimum salary.
Example: an employee’s gross salary is PLN 6,000. During the economic downtime, the employer will pay him/her a salary reduced by 50%, i.e. PLN 3,000, and will receive a subsidy of up to PLN 1,300 (50% of the national minimum salary) from FGŚP.
Reduced working time
In accordance with the Bill, an employer experiencing a decline in sales as a result of COVID-19 will be entitled to reduce working time by 20%, to not less than 0.5 FTE, however the employee’s subsequent salary may not be lower than the national minimum salary.
If the working time is reduced, the FGŚP salary subsidy may amount to up to half the employees’ remuneration, but not more than 40% of the average remuneration for work in the preceding quarter as announced by the President of the Central Statistical Office.
Decrease in sales as a condition for eligibility
The businesses eligible for a subsidy as a result of a working time reduction are those who, as a result of the COVID-19 epidemic, experience a decrease in the volume or value of sales of goods or services:
- of not less than 15%, calculated as the ratio of the total sales during any two subsequent calendar months (with 30 consecutive calendar days also being treated as one month) in the period from 1 January 2020 to the date immediately preceding the date of filing the subsidy application – to the total sales in the corresponding period in the previous year;
- of not less than 25%, calculated as the ratio of sales in any calendar month (or 30 consecutive calendar days) in the period from 1 January 2020 to the date immediately preceding the date of filing the subsidy application – to the total sales in the corresponding period in the previous year.
The proposed regulations do not explicitly state that a decrease in sales is a necessary condition for eligibility for the subsidy, however such intention can be inferred from the rationale for the Bill.
How to introduce new employment conditions?
It will be necessary to conclude an agreement with trade unions on employment conditions and work procedures during economic downtime or the period of reduced working time, or to lay down these rules in a collective agreement. If there are no trade unions, the relevant agreement is to be concluded with workers’ representatives. In particular, such agreement should identify the groups of employees affected by the economic downtime or reduced working time, and estimate the duration of restrictions.
Pursuant to the Bill, the agreement should be concluded within two days following the employer’s notification of his intention to introduce economic downtime or reduced working time. If no agreement is reached within this period, the employer will independently determine the conditions.
Payment of the subsidy – additional conditions
- No arrears in the payment of tax liabilities, social security, health insurance or Labour Fund contributions (until the end of the third quarter of 2019) and no reasons for filing for bankruptcy, are additional conditions for subsidy eligibility.
- Salary subsidies will be available for both people employed under contracts of employment, outwork contracts, service contracts or other agreements for provision of services.
- The subsidy will be available for up to 3 months.
- The subsidy will be paid based on an agreement with the competent Provincial Marshal.
- Subsidy applications are to be considered on a first-in, first-out basis, as long as funds remain available.
- In addition to salary subsidies, employers will also receive funds to pay social security contributions due from the employer on account of the subsidy received.
Attorney at Law, Partner, Head of Labor Law Practice
T: +48 660 765 903