State of epidemic in Poland and Anti-Crisis Shield draft published
On Friday 20 March 2020 the Minister of Health introduced state of epidemic in Poland. New regulations clarify some of the doubts raised by employers regarding the obligatory quarantine imposed on persons coming from abroad. Below we present a brief summary of the most important aspects:
- quarantine imposed on persons coming from abroad has been aligned to the quarantine imposed by the sanitary authorities;
- employee who is subject to a quarantine is obliged to remotely inform his/her employer about this fact (e.g. by e-mail, sms, phone call);
- after the end of a quarantine an employee should provide the employer with a written statement that he/she has been subject to an obligatory quarantine; such a statement will justify absence at work and will constitute base for payment of remuneration or sick benefits;
- statement of an employee in certain cases may be investigated by the employer;
- the above rules apply to quarantine(s) that began after 15 March 2020;
- some additional restrictions on shops and services has been imposed (groceries, pharmacies, laundries and petrol stations remain open).
Additionally, at the weekend the government presented draft of so called “Anti-Crisis Shield Act”. The draft will now be directed to the legislative path (Sejm – Senate – President). It cannot be ruled out that the draft will still change at the stage of legislative work, but in our opinion it is worth to familiarise with the direction in which anti-crisis solutions will follow.
Below we present the most important points of the draft for the employers.
Economic shutdown, shorter working time
- who have not been in arrears with payment of public-law liabilities (taxes, national insurance etc.) as at the end of 3Q 2019,
- whose financial condition does not justify declaring insolvency,
will be entitled to introduce an economic shutdown.
Additionally, entrepreneurs who will meet the above criteria and will also suffer a drop in turnover:
- 15% in the two following months after 1 January 2020 versus analogical months in 2019 or
- 25% from month to month in 2020,
will be entitled to shorten working hours.
Those who will introduce an economic shutdown or will shorten working time will be entitled to apply for financial aid from the Guaranteed Employee Benefits Fund (Fundusz Gwarantowanych Świadczeń Pracowniczych – FGŚP) to cover payments for employed persons.
The financial aid will be available to cover payments for i.a. employees and persons employed under civil law mandate contracts and/or contracts for provision of services being subject to compulsory retirement and disability national insurance.
Introduction of a shutdown and/or shortening working hours should be agreed with trade unions or employees’ representatives within 2 days as of notification of employers’ intention is made. After that period, if an agreement is not reached, an employer may introduce a shutdown and/or shorten working hours at its discretion.
- during shutdown – will be entitled to remuneration reduced by no more than 50% and not lower than the minimum statutory wage; additionally, they will receive an allowance from FGŚP in the amount of max. 50% minimum statutory wage;
- during shorten working time – will be entitled to remuneration reduced proportionally to the reduced working time, but no more than by 50% and not lower than the minimum statutory wage; additionally, they will receive an allowance from FGŚP in the amount of max. 50% of their remuneration, but not higher than 40% of an average wage.
FGŚP will also finance expenses for national insurance contributions due from the amounts of the allowance.
Initially, the government assigned PLN 800 million for this form of aid.
Aid will be granted on a “first-come, first-served” basis.
Aid will be granted for max. 3 months.
Our comments: Entrepreneurs who consider applying for this form of financial aid should mind the “first- come, first-served” rule.
Making working time regulations more flexible
Employers meeting certain criteria (significant drop in revenue, not having any outstanding public-law liabilities) shall be enabled to:
- reduce daily (from 11h to 8h) and weekly (from 35h to 32h) minimal uninterrupted rest time for an employee,
- introduce balanced working time system allowing for extension of a daily working time up to 12h within a calculation (balancing) period extended up to 12 months (it will require reaching an agreement with trade unions or employees’ representatives)
- apply terms of employment less favourable for employees than provisions stemming from their employment contracts (to the extent and for the period agreed between an employer and trade unions or employees’ representatives).
Our comments: This proposal shall be regarded as positive. However, in our opinion, there are no grounds to make benefitting from these measures dependent on lack of outstanding public-law liabilities. The introduction of balanced working time system should be possible at the employer’s discretion, without the necessity to agree on it with the staff.
Temporary exemption from payment of national insurance contributions (ZUS)
The bill is still expected to be extended with provisions under which persons self-employed, employed under civil law contracts and micro-entrepreneurs (employing up to 9 persons), which will suffer significant drop in revenue, will be exempted for the period of 3 months from the obligation to pay national insurance contributions (ZUS).
Our comments: This exemption may bring significant relief, but the circle of entities entitled should be definitely wider. Three-month exemption period may prove insufficient.
Additional carer’s allowance
- An additional carer’s allowance is to be granted to workers released from work to take a personal care of a child up to the age of 8 (or 18, if a child is severely or moderately disabled), if due to COVID-19 not only a nursery, kindergarten or school is closed, but also when care could not be provided by a nanny or childminder.
- The allowance will cover a period of up to 14 days, but the Council of Ministers will be authorised to issue regulation extending this period.
Our comments: The possibility to receive additional carer’s allowance will probably be extended over 14 days, which will be beneficial for employees.
During the announced state of an epidemic or epidemic threat:
- obligation to perform periodic and control check-ups of a “regular” employees, as well as medical and psychological examinations of drivers and train drivers, is to be suspended,
- initial or control check-ups may be performed by other than occupational medicine doctors – such examinations will expire 30 days after the state of an epidemic or epidemic threat is lifted.
Current medical examinations which have expired after 7 March 2020 are set to remain valid, but not longer than until 60 days after the state of an epidemic or epidemic threat is lifted.
Our comments: Exceptionally, employees with expired medical examinations will be allowed to perform work for a certain period. The employers will have to remember to arrange that medical examinations are conducted within 60 days after the state of an epidemic or epidemic threat is lifted.
Additional cash benefit for micro, small and medium entrepreneurs
In the event of significant drop in revenue (exceeding 30%) as a result of COVID-19 the district governor (starosta) will be authorised to grant entrepreneurs additional cash benefits to:
- co-finance remuneration due to employees and related national insurance contributions,
- cover the costs of business activity, if an entrepreneur does not employ any such persons.
The amount of the benefit will range from 50% to 90% of the minimum statutory wage.
The benefit will be paid for up to 3 months (for medium entrepreneurs) or 6 months (for micro and small entrepreneurs).
Our comments: The amount of the benefit awarded will eventually be adjusted by the value of support received from other public funds (e.g. due to economic downtime or reduced working time).
Standstill allowance for sole entrepreneurs and persons employed under civil law contracts
Standstill allowance will be available for:
- sole entrepreneurs who have met certain conditions, in particular who have:
- suspended business activity not earlier than on 1 February 2020,
- not suspended their business activity and suffered drop in revenue of at least 15% in the month preceding submission of an application in comparison to the previous month,
- persons employed under civil law contracts (agency contract, mandate contract, contract for provision of services, specific-task contracts) who have met certain conditions, in particular:
- the agreement has been concluded not later than on 1 February 2020, and
- the agreed remuneration amounts to at least 50% of the minimum statutory wage being in force in 2020.
The entitled person will be allowed to apply for a one-off allowance in the amount of 80% of the minimum statutory wage in 2020 (PLN 2,080). In extraordinary situations, upon decision of the Chairman of ZUS, allowance can be granted twice.
The conditions to obtain the aid will be, as follows:
- submitting a relevant application;
- continuous interruption business activity by a sole entrepreneur, or by the principal with whom the civil law contract was concluded, caused by the occurrence of COVID-19, lasting at least 30 days prior to the month when the application has been submitted,
- not having other title to be covered with the national insurance,
- not generating an income in the month preceding the month of submission of the application exceeding 300% of the forecasted average gross remuneration in 2020 (PLN 15,681),
- for persons employed under civil law contracts – not having obtained by the principal, with whom the civil law contract has been concluded, any aid for payment of salaries within other measures aimed to prevent negative effects of the COVID-19 outbreak.
Our comments: The applicant will have to fulfil many conditions to obtain the aid. Amount of the allowance seems to be relatively low.
Foreigners – extension of stay permits and visas, prolongation of deadlines
Stay permits and visas which would expire during the state of an epidemic or epidemic threat will be extended for 30 days after the state of an epidemic and epidemic threat are lifted.
Analogously, deadlines for applications for stay-permit and visas will be prolonged.
Prolongation of stay permits and visas does not require issuing stay cards or new visas.
Our comments: The proposed provisions are necessary, however, they do not address the problem of work permits and declarations of employment of foreigners which may also expire during the state of an epidemic or epidemic threat.
Reporting of specific-task contracts to the National Insurance Institution (ZUS)
From 2021 a payer of national insurance contributions will be obliged to report to the National Insurance Institution (ZUS) about each specific-task contract (umowa o dzieło) concluded with: (i) a person not employed by the payer under employment contract or (ii) a person who is not bound with employment relationship with an employer and does not perform work for such employer.
The deadline to report conclusion of a specific-task contract will be 7 days.
Our comments: The proposed new obligation for employers seems to be excessive and unjustified.
During the announced state of an epidemic or epidemic threat employers conducting activities consisting in ensuring the functioning of critical infrastructure systems and objects (including energy, ICT networks, water supply, petrol stations) and their subcontractors will be enabled, for this purpose, to:
- change working time systems and schedules,
- oblige employees to work overtime.
An employer will be obliged to provide employee with accommodation and meals necessary for the performance of duties. An employee will not be allowed to take leaves during this time, including leave “on-demand”.
Our comments: Restrictions on using leaves and additional obligations regarding accommodation and meals will apply to a limited number of employers.
Extension of deadlines for implementation of the Employees’ Capital Plans (PPK)
Deadlines for implementation of the Employees’ Capital Plans (PPK) by employers employing 50-249 persons will be extended by 6 months:
- deadline for reaching an agreement on financial institution – until 27 September 2020 (instead of 24 March 2020),
- deadline for conclusion of the PPK management agreement – until 27 October 2020 (instead of 24 April 2020),
- deadline for conclusion of the agreement for operating of PPK – until 10 November 2020 (instead of 11 May 2020).
Our comments: This proposal is important and necessary. We think that during the most critical time for employers also the obligation to make contributions to PPK shall be suspended.
Limitation of the ban on trade on Sundays
During the period of an epidemic or epidemic threat and 30 days after they have been lifted, the ban on trade on Sundays will not apply to unloading, receiving and displaying necessities and to employees who will perform such works.
Our comments: The proposed solution is a good idea – maintaining supplies to stores is a priority. Interpretation of an expression “necessities” may be problematic. Eventually, lifting or further limitation of the ban on trade on Sundays will have to be considered in order to prevent negative impact of COVID-19 on the entire economy.
Remuneration policies in listed companies
The deadline for adopting remuneration policies for members of management boards and supervisory boards in listed companies is to be prolonged. The new deadline is 31 August 2020.
Our comments: The proposed change would be more useful, if the date for convening ordinary general meetings is also prolonged (pursuant to the proposed Article 15zze). Otherwise, remuneration policies will still be put to the vote usually by 30 June 2020, i.e. by the lapse of 6 months after the end of a “standard” financial year.
Support for certain institutions during suspension of operation
The bill envisages support for i.a.:
- vocational development centres (compensation for remuneration due to disabled employees),
- occupational therapy workshops (maintaining financing from the Disabled Persons Rehabilitation Fund (PFRON)),
- social integration centres/clubs (maintaining financing and integration benefits),
- support centres for mental disordered persons (maintaining subsidies),
- nurseries, children’s club and childminders (maintaining subsidies from “MALUCH+” program).
Our comments: Extra support for this special institutions are well justified and necessary.