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Coronavirus: First aid for employees and employers.

The anti-crisis shield adopted by the parliament on 31 March 2020 introduces a range of instruments for reducing the costs of employment, including subsidizing employees’ salaries out of the Guaranteed Employee Benefits Fund (FGŚP).

Possibilities for subsidizing employees’ salaries

A business will be able to obtain subsidies during a period of “economic standstill” or “reduced working time” introduced by the enterprise, in the event of a decline in economic turnover:

Of no less than 15%, calculated as “the ratio of combined turnover in two successive months during the period following 1 January 2020 to the combined turnover from the same two months in the previous year, as a consequence of occurrence of COVID-19” or
Of no less than 25%, calculated as “the ratio of combined turnover during any selected month during the period following 1 January 2020 compared to the turnover from the previous month.”

The amount of the subsidy from FGŚP varies, depending among other things on what solutions the employer decides to adopt.

Economic standstill

In the case of economic standstill, i.e. a situation where an employee does not perform work for reasons independent of the employee, but while remaining in readiness to work, the employer may:

A. Pay the employee salary reduced by no more than 50%, but in an amount at least equal to the minimum wage for work out of funds from FGŚP,
B. Receive a subsidy for salary during the period of economic standstill in the amount of 50% of the minimum wage plus social insurance contributions due on the benefits paid by the employer (i.e. PLN 1,533.09 per month ), taking into account the amount of working time.

No subsidy is due for salaries higher than 300 times the average monthly salary for work in the economy in the preceding quarter.

Reduction of working time by the employer

Due to a decline in turnover as a consequence of spread of the coronavirus, the employer may reduce the working time of an employee by 20%, but to no less than 50% of full-time. However, the salary may not be lower than the minimum salary for work, taking into account the amount of working time. In the case of introduction of reduced working time, the employer will be able to:

A. Receive a subsidy from FGŚP for up to a maximum of 40% of the average monthly salary from the preceding quarter announced by the president of Statistics Poland (GUS), plus social insurance contributions due from the employer on the benefits awarded, i.e. PLN 2,452.27 per month.

Again, no subsidy is due for salaries higher than 300 times the average monthly salary for work in the economy in the preceding quarter.

When should an application be filed?

The benefits described above are to be payable for a total period of three months following the date of filing of the application for payment of the benefits, although, through an executive regulation, the Council of Ministers may extend this period in light of the period in which a state of epidemiological threat or state of epidemic is in force, as well as the consequences caused by such state.

Electronic applications should be filed with the director of the province labour office after completing all the formalities provided for by the act.

How can we help?

We offer comprehensive assistance to employers in obtaining funds for subsidizing employees’ salaries for the purpose of protecting jobs in connection with the coronavirus epidemic.

As part of our services:
a. We analyse the formal legal situation of the business to verify the possibilities for seeking these subsidies;
b. We prepare calculations of individual amounts of subsidies for employees’ salaries depending on the solutions adopted: economic standstill and/or reduction of working time;
c. We assist in conducting consultations and in the procedure for notification of employees, and draft agreements with employee representatives;
d. We draft applications for subsidies and file them with the labour office.

Ilona Węgłowska-Hajnus
Payroll Director

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