CZECH GOVERNMENT MEASURES REGARDING EMPLOYER COMPENSATION
A number of extraordinary measures have been recently taken in order to prevent the spread of coronavirus and their consequences are adversely affecting many areas of daily life. One of the most affected areas is the relationship between employers and their employees, therefore we deliver you below a basic overview of situations that may arise in connection with these emergency measures.
EMPLOYEES WHO WERE ORDERED TO QUARANTINE
This situation is assessed as an important personal obstacle on the part of the employee and the same rules apply as in the case of temporary incapacity for work. Employees are entitled to wage compensation of 60% of reduced average earnings.
On March 31, 2020, the Czech government approved a draft of the so-called Antivirus program (hereinafter referred to as the “Program”), which should help companies to protect their workplaces and thus prevent collective redundancies. According to the Program, the state will reimburse wages for employees to employers through the Labor Office (under condition that the employer proves that an obstacle to work has arisen as a result of the spread of coronavirus).
Therefore, if the employee is ordered to quarantine, according to the Program, the state will pay employers a wage allowance of 80% of the paid wage compensation, including health insurance and social security contributions, up to a maximum of CZK 39,000.
EMPLOYEE WHO MUST CARE FOR A CHILD UNDER 13 YEARS
If the employee has to care for a child under the age of 13 (due to the closure of a school facility or the closure of some social services for the handicapped), the employee is then entitled to a caretaking compensation for the entire duration of the current emergency measures. If the employee cares for a handicapped child, no age limit applies. The claim may also be applied retroactively as of the date of closure of the aforesaid institutions.
EMPLOYER DOES NOT ASSIGN WORK TO EMPLOYEE DUE TO ABSENCE OF MAJORITY OF OTHER EMPLOYEES
If the employer does not assign the work to the employee due to the absence of a large number of other employees, this situation is considered as an obstacle to work on the part of the employer and the employee is entitled to wage or salary compensation equal to 100% of average earnings.
According to the Program, the state intends in such cases to pay employers a wage allowance of 60% of the paid wage compensation, including health insurance and social security contributions, up to a maximum of CZK 29,000.
EMPLOYER DOES NOT ASSIGN WORK TO EMPLOYEE DUE TO LACK OF RAW MATERIAL, SERVICES etc.
Again, this situation is qualified as an obstacle on the part of the employer and the employees are entitled to a wage or salary compensation of at least 80% of their average earnings.
According to the Program, the state also intends in such cases to pay employers a wage allowance of 60% of the paid wage compensation, including health insurance and social security contributions, up to a maximum of CZK 29,000.
CLOSURE OF BUSINESS DUE TO EXTRAORDINARY EMERGENCY MEASURES
The fact that certain businesses have been temporarily closed down or restricted as a result of emergency measures (i.e. the closure of restaurants, gyms, etc.) again constitutes an obstacle on the part of the employer and thus the employees are entitled to wage or salary compensation equal to 100% of the average earnings.
But beware! If the employer is unable to assign work to the employee in the extent of a standard weekly working period due to a temporary reduction in demand for its products or services, and concurrently, if there is an agreement between the employer and trade union, the employee is entitled to wage compensation of at least 60% of the average earnings. If the trade union does not operate with the employer, such agreement may be replaced by an employer´s internal regulation.
In these cases, employers are entitled under the Program to a financial contribution from the state in the amount of 80% of the paid wage compensation, including health insurance and social security contributions, up to a maximum of CZK 39,000.
CLOSURE OF BUSINESS DUE TO REDUCED DEMAND FOR PRODUCTS
If the business is closed or restricted because of a reduction in demand for products, the employee is entitled to wage or salary compensation equal to the average earnings. Here again, however, the above applies, i.e. if the employer cannot assign work to the employee in the extent of standard weekly working period caused by a temporary reduction of sales of its products or a reduction in demand for services provided, and at the same time there is an agreement between the employer and trade union, the employee is entitled to wage compensation of at least 60% of the average earnings.
In relation to the employer’s costs, employers should be entitled to a financial contribution from the state in the amount of 60% of the paid wage compensation, including health insurance and social security contributions, up to a maximum of CZK 29,000 according to the Program.
CONDITIONS FOR PAYMENT OF EMPLOYER´S FINANCIAL CONTRIBUTIONS
However, in order to reach the financial support, employers will be obliged to fulfill several conditions for the payment of financial contributions to employees’ wages:
a) strict adherence to the Labor Code;
(b) the employee must not be dismissed by notice;
(c) the payment of contributions is intended to firms in the business sphere, employees must be in labor relationship and be participating in health insurance and social security systems;
(d) the employer must pay the wage and health insurance and social security contributions.
The financial contributions will be provided by the Labor Office, whereas the amount and duration will depend on the reason for the obstacle at work. Applications for contributions will be possible to submit from April 6, 2020 and according to the Ministry of Labor and Social Affairs it will be possible to do so electronically.
The employers will be able to apply for payment of the wage compensation after the end of the reporting period, i.e. after the end of the calendar month for which it will apply for the contribution. For the month of March, the employer will therefore apply at the beginning of April.[1]
For more information on this subject, please feel free to contact:
JUDr. Monika Rutland, partner
rutland & partners, law firm
tel: +420 226 226 026
email: monika.rutland@rutlands.cz
[1] MINISTERSTVO PRÁCE A SOCIÁLNÍCH VĚCÍ . Antivirus: podpora zaměstnanosti [online]. mpsv.cz, 31. March 2020 [cit. 01. April 2020]. Available at: < https://www.mpsv.cz/web/cz/antivirus >.
