G.E.O. no. 132/2020 which regulates multiple aid measures in favor of employees and employers, among which the long awaited Kurzarbeit, we previously discussed about, entered into force yesterday, August 10th, 2020.

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Measures on supporting and stimulating the work force – legal context

G.E.O. no. 132/2020 which regulates multiple aid measures in favor of employees and employers, among which the long awaited Kurzarbeit, we previously discussed about, entered into force yesterday, August 10th, 2020.

The current situation of the labor market

This concept is launched in a labor market where, according to the latest update, of August 3rd, 2020, there are around 102,000 suspended labor agreements and where, according to the Prime Minister and the Minister of Labor, the number of persons whose labor agreements were terminated is slightly lower than that of January, 2020. With no intention to enter into a debate regarding the number of actually affected employees, based on various interpretations of the situation reflected by Revisal, it is obvious that some people have either lost their jobs or they have kept them, their contracts being suspended or adapted to each of their employers’ situation.

The form the “Kurzarbeit” concept took in Romania

The Romanian Government, through G.E.O. no. 132/2020, has clarified the eligibility conditions for an employer to benefit from this aid. As such, the minimum percentage of affected employees (at least 10% of the total number of employees) and the percentage decrease in turnover, comparative to last year’s similar month, namely at least 10%, have been, in great lines, remained the same as the ones provided previously by the Romanian National Investment and Economic Relaunch Plan.

However, the last condition has a broader interpretation as per G.E.O. no. 132/2020, as the legal text provides that the measure can be taken if the employer has registered at least a 10% turnover decrease not only during the month preceding the one during which the measure is taken, as the Romanian National Investment and Economic Relaunch Plan provided, but also during the month before the preceding month.

Additionally, the percentage granted by the State (75% of the difference between the full gross wage of the employee prior to the reduction of the work schedule and the gross wage corresponding to the working hours effectively undertaken as a consequence of the reduction of the work schedule) has remained unchanged.

One of the differences, compared to the German model, is that the employees’ activity can be reduced by 50% at the most, over a time spam of at least 5 consecutive working days. The measure can be taken by the employer by informing and consulting the union, the representatives of the employees or the employees and communicated afterwards to the employee.

The 75% short-time work allowance is initially borne by the employer and is paid at the same time as the wage and, the employer having to recover it from the unemployment insurance budget, only after the fulfilment of the declarative and payments obligations related to the incomes from salaries.

There are also some prohibitions to be taken into consideration by the employers. They will not be able to hire or subcontract other persons to undertake the specific activities of the employees whose’ work schedule has been reduced, nor will they be allowed to make collective dismissals while they benefit from this short-time work allowance. In the same category, of certain limitation provided by the law, the affected employees will not be able to undertake overtime and any bonuses or increases for the company management will be granted only after the expiry of the period during which the reduction of activity took place.

It is worth mentioning that this type of activity reduction cannot overlap the one provided by art. 52 para. (3) of the Labor Code, respectively the reduction of work duration from 5 to 4 days “for economic, technological, structural or similar reasons, over time spams of less than 30 working days”.

Additionally, the short-time work allowance cannot be combined with other types of previously regulated allowances, namely with the amount granted as of June 1st, 2020 to the employees  of the industries which were still affected by the Covid-19 pandemic, of 41.5% of the gross wage (capped to the average wage). In any case, this measure shall be applicable only up to September 1st, 2020, therefore the possible overlap period was an extremely short one. Also, the employers who, for certain categories of engaged persons, receive RON 2,500/month/employee until 31st of December, 2020, as well as the day laborers will be denied this short-time work allowance.

From a fiscal perspective, the short-time work allowance is taxable, being assimilated to the salary income and the social contributions, as well as, by exception, the  work insurance contribution  will be borne.

A few gray areas currently subsist, concerning the time spam of the measure, as well as the procedure of settling the amounts, aspects to be later clarified, by way of Government decision.

Telework – financial support

As announced by the Romanian National Investment and Economic Relaunch Plan, each teleworker shall benefit from a financial aid of RON 2,500 in order to acquire the necessary technological goods and services that enable him/her to perform their jobs in a telework regime. The relevant amount can be requested by the employer until December 31st, 2020 and shall be borne, within the available funds, by the unemployment insurance budget, provided that the envisaged employees have worked under telework regime for at least 15 working days during the emergency state.

The categories of goods which can be acquired, as well as the actual means to benefit from this support shall be established by way of order issued by the competent minister. The employer has the obligation to provide to the National Employment Agency the justifying documents attesting the acquisition, within 30 days as of the granting of the amount, under the sanction to having to return it, after another 30 days as of the previously mentioned expiration date.

Day-laborers – means of protection

One of the novelties of the post-Covid 19 legal field consists in the support of unqualified activities  carried out by day-laborers. As such, over a three-month period, but no later than December 31st, 2020, the beneficiaries of activities from the categories affected by the Covid-19 pandemic mentioned by Law no. 52/2011 on the exercise of occasional activities carried out by day-laborers, shall be eligible to request an amount of 35% of the work day compensation from the state budget. However, as is the case of the short-time work allowance, this amount is initially borne by the employer, and is later on recovered from the state budget allocated to the Ministry of Labour and Social Protection, through the National Agency for Payments and Social Inspection and the county, respectively Bucharest payment and social inspection agencies, based on a procedure to be adopted by way of government decision. The relevant requests shall be submitted during the first 5 days of each month, for the previous month, and the amounts shall be wired in 10 days as of the submission of the request.

Other measures

Another measure taken by the Government refers to the sustaining, by way of a payment of 41.5% of the salary of employees who conclude individual labor agreements for a determined period of up to 3 months, capped at 41.5% of the average gross wage provided by the 2020 State Social Insurance Budget Law  no. 6/2020. The allowance is granted until the 31st of December, 2020, and the settlement shall be done from the unemployment insurance budget within 10 days as of the date of the registration of the relevant requests by the employers, by observing a procedure that shall be approved by way of Government decision. The employers shall submit requests only after fulfilment of the declarative and payments obligations related to the incomes from salaries.

G.E.O. no. 132/2020 also refers to the help available to professionals and persons who have concluded individual labor conventions and who, in case of activity reduction under the conditions provided by the law, shall be able to benefit, upon their request, from a monthly compensation of 41.5% of the average gross wage provided by the 2020 State Social Insurance Budget Law  no. 6/2020.

Exceptions

G.E.O. no. 132/2020 does not apply to public institutions, employers who are facing bankruptcy, dissolution, liquidation or whose are suspended nor to employers who are registered in fiscal purposes non-cooperating jurisdictions.

Andrada Bulgaru is a practice coordinating partner in the Bulboacă & Asociații Law firm.