Today, on March 20th, 2020, the National Parliament adopted a proposal for the Wage and Contribution Measures Intervention Act (“ZIUPPP”), which should, with the intervention measures, help employers (and indirectly workers) mitigate the effects of the SARS-CoV-2 (COVID-19) epidemic, also known as coronavirus.
ZIUPPP is scheduled to be published in the Official Gazette of the Republic of Slovenia early next week and will enter into force one day after its publication.
The key measures governed by ZIUPPP are (i) reimbursement of part of the wage compensation for those workers to whom the employer is temporarily unable to provide work due to the coronavirus and is therefore ordering them to wait for work, (ii) reimbursement of the full salary remuneration to the employer for those workers who are not on sick leave but who have been quarantined to prevent the spread of coronavirus, and (iii) deferred payment of social security contributions due in April, May and June for self-employed persons until the 31st of March 2022. Additionally, ZIUPPP also envisages extending the reference period in the case of uneven distribution and temporary redeployment of working time for 2020, irrespective of the provisions of Article 148 (7) of the Employment Relationships Act (ZDR-1), to 12 months – for employers for which a collective agreement at the activity level provides such a longer reference period, there are no changes.
The right to reimbursement means that employers will first have to pay their wages from their own resources, and then they will receive partial (or full, in the case of quarantine workers) reimbursement from the state, not later than the last day of the month following the month of payment (i.e. partial reimbursement of the wage compensation for the month of April will be received by the employer by the end of June).
Partial reimbursement of wage compensation for workers to whom employers temporarily cannot provide work due to coronavirus
The biggest impact on the operations of larger companies will certainly come from the first measure, i.e. subsidizing part of the wage compensation for all those workers to whom employers temporarily cannot provide work due to coronavirus. The measure seeks to preserve the employment of such workers. It should be borne in mind that only those employers who will post at least 30% of all workers to wait for work due to the effects of the virus (and not for any other reason) will be eligible for the subsidy, and who will respect the conditions and procedure laid down by ZIUPPP to obtain the right to a subsidy.
Workers who are temporarily sent to waiting by employers due to the effects of the virus (on business) will be entitled to 80% of the base allowance at the time of waiting for work, i.e. 80% of the average (and not basic!) monthly full-time salary that a worker received in the last three months prior to the determination of the waiting time. This is the base allowance already laid down by Article 138 of ZDR-1 for the case of waiting for work for business reasons, whereby, on the basis of the ZIUPPP, 40% of the compensation (or 32% of the basis), but not more than 892.50 EUR gross, will be government subsidized. This measure will therefore be more favourable to the employer than if he had to cover the employee's remuneration due to force majeure, where the worker is entitled to 50% of the base, but at least 70% of the minimum wage, i.e. at least approx. 658 EUR gross.
Employers will not be automatically entitled for reimbursement of part of worker’s compensation but will have to file (electronically or in writing) an application in 8 days from the day when they ordered the workers to wait for work, claiming the right to partial reimbursement of paid wages. The application will be decided in the administrative procedure, and in the case of a positive decision, an appropriate contract will be concluded between the ESS and the employer. Each employer will only be able to claim the right to the described reimbursement once.
Those employers who have ordered workers to wait for work before the ZIUPPP enters into force must submit their application within 8 days of the entry into force of the Act, but they will only be entitled to reimbursement for the period from the entry into force of the Act. For the period before the entry into force of the Act, the 80% compensation of workers in waiting will have to be fully covered by the employer alone.
According to ZIUPPP, the employer may refer the worker on a waiting period of up to three months, at which point he/she may be called back to work (early or temporarily) at any time. If a trade union is organized with the employer, the employer must consult the trade union or the works council in the absence of a union, before making the decision. If there is neither a union nor a works council with the employer, the employer must give prior notice of the posting to the workers in the manner usual with the employer (e.g., via message board, intranet, official e-mail, etc.).
In addition, to proving that at least 30% of all its employees (other than employers employing only one worker) have been posted to waiting, the employer will also have to submit a description of the business situation due to the effects of the virus, i.e. a description of the business reason, together with management's assessment of the possibility of retaining the workplaces of those who are ordered to wait for work. In addition, the employer will have to enclose a written statement of commitment to retain the posts of temporarily posted workers to waiting, for at least 6 months from the date of posting.
The draft law provides for some additional conditions and restrictions for the involvement of employers and/or individual workers in the described measure and for the duration of the measure, such as:
i) in the case of part-time workers who have excess hours (or have excess hours due to temporary reallocation of working hours), the employer will first have to balance the excess hours before posting the worker to wait for work (unless he / she proves that this is not possible for objective reasons);
ii) it will not be permissible to include workers who are already on the notice period;
iii) employers who have the status of tax non-payer at the time of application and employers who in the last three months have not paid workers regularly their salaries and their social security contributions and employers who have been insolvent under the FOIPCDA are not eligible for the subsidy;
iv) during the duration of the measure, the employer will not be allowed to give overtime to the workers who will be working, if this work could be done by workers on standby;
v) during the duration of the measure, the employer will also not be allowed to terminate any other employees (i.e. even those who are not on standby) due to business reasons;
vi) if, during the waiting period, the employee obtains the right to be absent from work on another basis (e.g. use of leave, sick leave, etc.), the employer is not entitled to a partial reimbursement regulated by ZIUPPP for the duration of the payment of compensation on another basis.
It is worth noting that until the decision of the ESS is received by employers, they will be uncertain as to whether or not they will be entitled to partial reimbursement of wages, but the ESS should not deny them this right without justified reasons.
Reimbursement of wages to workers who cannot work due to quarantine
This measure is an individual measure whereby the state assumes the burden of paying wage compensation for those workers who are not sick from the virus, but who have been quarantined and therefore are not able to work (not at the employer’s location, not at home). During the quarantine, workers will be entitled to 80% of the wage compensation (i.e. the same compensation as in the case of waiting for work). Even in this case the employer will first have to pay the compensation from own resources before being fully reimbursed by the state, based on the appropriate application with the ESS. The application will have to be provided by the employer with evidence from the competent authority of the specified quarantine (specific worker) and his / her statement that the worker cannot perform work at home.
The employer will be entitled to reimbursement of the compensation for the duration of absence from work due to quarantine, but no longer than 30th September 2020.
Deferral of contributions for self-employed persons
On the basis of public initiatives, this measure, which is intended for self-employed persons, has also been added during the law-making process. In the III. Chapter, ZIUPPP provides that self - employed persons pursuing any authorized activity, who are included in compulsory insurance on the basis of the pursuit of that activity, shall be entitled to deferment of contributions due in April, May and June 2020.
The deferred contributions for the above three months will have to be paid by the beneficiaries by the 31st of March 2022 at the latest. The beneficiaries will also be able to pay these contributions in instalments.
ZIUPPP also specifies when a self-employed person is not entitled to deferred payment of contributions, namely:
i) if he qualifies for compulsory insurance coverage on another insurance basis;
ii) if he has other employees;
iii) if he is entered into the business register or other register / records only after the entry into force of ZIUPPP;
iv) if he does not meet the mandatory duties and other non-tax liabilities, if the value of these outstanding arrears as of April 6th, 2020 is at least 50 EUR;
v) if, by the date of entry into force of ZIUPPP, the process of termination of business began.
For any further questions regarding ZIUPPP, submitting an application to the ESS, preparation of the required documents and more, we are at your disposal!
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