Legal Alert | Anti-Crisis Shield from Employers’ Perspective
Further regulations of the Anti-Crisis Shield, intended to support businesses affected by the COVID-19 epidemic, have recently taken effect. The following solutions are significant from an employer’s 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, falling after 31 December 2019, 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 15,994.41 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 period 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 personnel’s 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 PLN 15,994.41 gross.
Salary subsides from the Guaranteed Employee Benefits Fund (FGŚP) for employees not covered by the downtime or reduced working hours
- An entrepreneur may obtain a salary subsidy from the Guaranteed Employee Benefits Fund for employees, without the need to reduce the working time or introduce economic downtime.
- The requirement for obtaining a salary subsidy is to record a decrease in economic turnover.
- No agreement with employee representatives is required.
- The subsidy is granted at half of the employee’s salary, but no more than 40% of the average monthly salary in Poland (PLN 2,132.59 gross, approx. EUR 482 gross).
- Employees receiving a salary higher than three times the average salary from the previous quarter are not eligible for the subsidy (approx. EUR 3,615 gross).
- The subsidy is granted for up to 3 months from the month of application.
- Funding is only applicable to an entity which has not received any aid to protect workplaces;
- During the period of receiving the subsidy, the entrepreneur cannot terminate the employment contract for reasons not related to the employee.
- The subsidy application is submitted to the director of the provincial labour office.
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 31 December 2019 to the corresponding two consecutive months in 2019.
- 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 date of application and will be paid monthly on the basis of the data accompanying the application (statement of employment of the staff concerned and statement of remuneration of each such staff member)..
- The employer is obliged to inform the county labour office of any change in the above mentioned data, affecting the amount of the subsidy paid, within 7 days until the date of obtaining information about its occurrence, by way of a statement. In the event of a change in the data, the county labour office shall determine the amount of the next tranche based on the new data.
- The subsidy application must be submitted to the county labour office (powiatowy urząd pracy) competent for the place of the company’s business after the application procedure is opened by the director of the county labour office.
- 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. This does not apply in the case of termination of the employment relationship or termination of the employment contract with the subsidised employee, provided that a new person is employed in his place).
- 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.
Reduction in working time or introduction of downtime in the event of a significant increase in the employer’s difficulty in meeting salary commitments without applying for funding from the Guaranteed Employee Benefits Fund (FGŚP)
- The employer experiencing significant difficulties in meeting salary commitments due to a decrease in economic turnover as a result of COVID-19 may:
- reduce an employee’s working time by a maximum of 20%, but not more than to a half-time basis, with the salary not being reduced below the minimum salary for work, taking into account the number of working hours prior to the reduction;
- cover an employee with economic downtime by reducing the salary by up to 50%, but not below the minimum salary, taking into account working time.
- A significant increase in the employer’s difficulty in meeting salary commitments means an increase in the quotient of employee salary costs, taking into account employee social security contributions financed by the employer, and revenues from the sale of goods or services in the same calendar month, arbitrarily indicated by the employer, falling between 1 March 2020 and the day preceding the employer’s use of the solutions above, by no less than 5% compared to such a quotient from the previous month (baseline month); these solutions may be applied if the quotient of salary costs calculated as specified above is not less than 0.3.
- Reduced working time or economic downtime may be introduced for a maximum of 6 months, upon agreement with employee representatives.
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, employers facing a decline in turnover may introduce solutions to make working time and employment conditions more flexible. These changes should be introduced by way of agreement with trade unions or, in the absence of unions, with employee representatives.
- 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.
- These forms of flexibility in working time and changes in employment conditions may be applied if there has been a decline in economic turnover. This means a decrease in the sales of goods or services (in quantity or value), as a result of COVID-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.
- The new regulations clarify the rules of remote work entrusted to an employee in connection with counteracting COVID-19. The employer will have to take into account that an employee may not always be able to provide work remotely. The employer may entrust remote work to an employee who has the skill, technical facilities and adequate environment to perform it.
- The employer is obliged to provide tools and materials needed for work, and ensure logistic support for such remote work. Employees may use their own tools and materials when performing remote work, provided that this does not pose a threat to the protection of confidential information and other secrets protected by law.
- Having a limited possibility of controlling remote work, the employer may require the employee to maintain records of the activities performed.
Additional care allowance
- The allowance is granted (retroactively as of 25 May this year) to insured persons caring for children under 8 years of age, i.e. not only those caring for disabled children, with the previous rules in this respect being re-established.
- The additional care allowance period has been extended to 12 July 2020.
- The allowance is granted in the event of closure of the institution to which the child attends, as well as in the event that the institution remains open, in the case of personal care of the child.
Limitation of severance pay
- The amount of severance pay or any compensation paid in connection with the termination of the employment relationship has been limited to 10 times the minimum wage.
- The statutory limitation applies to those employers who have experienced a decrease in economic turnover or a significant increase in difficulties in meeting salary commitments during the state of epidemic or the state of epidemic threat.
- The same rules apply in the event of termination or renouncement of mandate, service and specific work contracts, or termination of paid service, except for agency contracts.
Possibility of granting overdue leave
- During the state of epidemic threat or state of epidemic, the employer is entitled to grant the employee an overdue leave of up to 30 days (i.e. leave not used in the previous calendar years) without having to obtain the employee’s consent, and even in different dates than initially scheduled in the leave plan.
- The employee, to whom the employer unilaterally imposes a deadline for the use of overdue leave, is obliged to accept the granted leave.
- Many employers intended to avoid accumulating holidays and had already granted overdue leaves to their employees based on the previous regulations. Shield 4.0 dispels all doubts that have arisen so far in this respect.
Changes regarding the Company Social Benefits Fund
- The employer may suspend the obligation to create or operate the Company Social Benefits Fund, to pay holiday benefits, as well as not to apply the provisions of collective bargaining agreements or salary regulations setting a higher – than statutorily required – amount of contribution to the Company Social Benefits Fund.
- These obligations may be suspended by the employer experiencing a decrease in economic turnover or a significant increase in difficulties in meeting salary commitments during the state of epidemic threat or state of epidemic.
- The suspension of such obligations requires the conclusion of an agreement with trade unions (if operating at the employer).
- The non-competition agreement may – following termination of the employment, agency, mandate, service or specific work contract – be terminated during the state of epidemic threat or state of epidemic with 7 days’ notice, regardless of the contractual provisions.
- The right to terminate the non-competition agreement is unilateral and applies solely to the entity subject to the non-competition obligation. This means that the contract may be unilaterally terminated by the employer, principal or contracting authority. If the contract is terminated, the obligation to pay compensation for compliance with the non-competition clause also expires. This regulation is therefore intended to reduce the employer’s financial obligations.
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 for a 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 who have suspended their business activity 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 April 2020.
- Persons working under a civil law contract may apply for the downtime payment if the contract was concluded before 1 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 15,994.41 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 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 to ZUS up to 9 insured persons as well as self-employed paying contributions only for themselves 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.
- The self-employed may apply for the exemption in question when they were active before 1 April 2020 and:
- (a) their income in the first month for which the application for exemption was submitted was not higher than PLN 15,681.00 gross, or
- (b) their income obtained in the first month for which the application for exemption was submitted was not higher than PLN 7,000.00, even if the income exceeded PLN 15,681.00 gross. Persons using the so-called reliefs for the start may also benefit from the exemption.
- 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 or a 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.
- The possibility of changing the conditions of work performed by a foreigner has been introduced, without the need to change the temporary residence and work permit, work permit or seasonal work permit, obtain a new such permit or enter a new statement on entrusting work to the register of statements.
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 obtain a 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.
(*) 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), the Act on special support instruments in connection with the spread of SARS-CoV-2, dated 16 April 2020 (Journal of Laws of 2020, item 695), the Act amending some acts regarding protection measures in connection with the spread of SARS-CoV-2, dated 14 May 2020 (Journal of Laws of 2020, item 875), and the Act of 19 June 2020 on interest rate subsidies on bank loans granted to entrepreneurs affected by COVID-19 and on the simplified procedure for the approval of the arrangement in connection with the occurrence of COVID-19 (Journal of Laws of 2020, item 1086).
Attorney at Law, Partner, Head of Labor Law Practice
T: +48 660 765 903