The second version of the "Anti-Crisis Shield" (project from 26/03/2020)

Economic shutdown, shorter working time

Entrepreneurs:

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,
who suffer a drop in turnover not lower than:
- 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 introduce economic shutdown or shorten working time.

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 will required agreement with trade unions or employees’ representatives. The second version of the draft bill (as of 26 March 2020) no longer provides a mechanism that allowed employers to introduce economic lockdown and/or shorten the working time at its discretion if an agreement was not reached within 2 days. We find this change disadvantageous.

Workers:

during shutdown – will be entitled to remuneration reduced by no more than 50% and not lower than the minimum statutory wage (accordingly to the number of their working hours); additionally, they will receive an allowance from FGŚP in the amount of 50% minimum statutory wage (accordingly to the number of their working hours);
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 (accordingly to the number of their working hours); 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 in previous quarter.

The financial aid will not be available to cover payments for employees whose remuneration in the month preceding the application for subject benefit exceeded 300% of the forecasted average gross monthly remuneration in the national economy in 2020 (i.e. PLN 15,681).

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 but the Council of Ministers will be authorised to issue regulation extending this period.

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).

If there are no trade unions at the employer and it is difficult to elect employees’ representatives, it will be possible to reach an agreement with the employees’ representatives previously elected for other purposes.

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)

Exemption from the obligation of social contributions payment for 3 months (as of 1 March 2020 until 31 May 2020) after meeting certain criteria will be available to:

micro-entrepreneurs (up to 9 persons employed) along with their cooperating persons and their workers (e.g. employed under employment contract, mandate contract)
self-employed individuals on the condition that their income in the month preceding the submission of application did not exceed 300% of the average monthly salary (in 2020 – PLN 15,681).

Our comments: This exemption may be a significant relief but the circle of the entitled entities should be definitely wider. Three-month period of exemption 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;
- with a disability certificate (issued until the age of 16);
- up to age of 18, if a child is severely or moderately disabled;
- with a decision on the need for special education.

– 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.

Medical examinations

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; or
cover the costs of business activity, if an entrepreneur does not employ any employees.

The maximum amount of co-financing per employee will range from a maximum of 50% to 90% of the minimum wage plus national insurance contributions (depending on the amount of decline in turnover).

The maximum amount of funding for an entrepreneur who does not employ employees will be from 50% to 90% of the minimum wage (depending on the amount of decline in turnover).

The benefit will be paid monthly for no more than 3 months. The Council of Ministers will be able to extend this period on the basis of an appropriate regulation.

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). The act imposes on the employer the obligation to maintain in employment the employees for whom the benefit was granted for a specified period of 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).

The Council of Ministers will be authorised to issue regulation which grant a new payment of the standstill allowance taking into account the duration of the period of an epidemic or epidemic threat and the caused effects.

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,
in case of sole entrepreneurs – 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 which have been mitigated during the project works. But amount of the allowance still seems to be relatively low.

Foreigners – extension of stay permits and visas, prolongation of deadlines

The bill provides that:

stay permits,
visas,work permits,
registered statements of appointing work performance to the foreigner

-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 (for the duration of the state epidemic or epidemic threat and).

Analogously, deadlines for applications for abovementioned permits and visas will be prolonged.

Prolongation of stay permits and visas does not require issuing stay cards or new visas.

Our comments: Employers and foreigners have to remember to submit applications within 30 days from the date of lifting 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.

Critical infrastructure

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 initial deadline for adopting remuneration policies for members of management boards and supervisory boards in listed companies (30 June 2020) is to be maintained. However, the Minister of Finance will be able to issue a resolution postponing this date depending on the situation with COVID-19.

Our comments: At this moment, listed companies should be ready to adopt the renumeration policy until the current date. However, it should be taken into account that this deadline may eventually be postponed.

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.

The second version of the “Anti-Crisis Shield” (project from 26/03/2020)