The first wave of the COVID-19 pandemic has been successfully averted. Employers who have survived the situation are currently entitled to contributions or other benefits provided by the Antivirus Program, which was introduced by the Ministry of Labour and Social Affairs of the Czech Republic (MLSA) with effect from 16. 3. 2020.
The purpose and goal of the program is to support employees and employers who were indirectly affected by the adverse situation of the coronavirus pandemic (COVID-19), consisting in the partial coverage of wages and salaries paid to employees. The support is intended to help manage the months in which employees could not go to work on a regular basis and in the following months, in which the restrictive measures taken as a result of preventive measures against the spread of coronavirus will still be reflected.
This article briefly summarizes the current options for drawing contributions from the Antivirus program, which employers can apply in relation to June and later wages.
Continuation of the Antivirus regime A (forced traffic restrictions and quarantine)
As of 31 August 2020, regime A of the Antivirus program will be terminated, which makes it possible to compensate for the costs of employees who were prevented from performing work for reasons directly resulting from the state’s crisis measures. Regime A also compensates wage compensation for quarantined employees.
The contribution can be drawn in the amount of 80% of the paid wage compensation (including levies), up to the amount of CZK 39,000 per employee per month. The employer can apply for a financial contribution until the end of August of that year.
Continuation of Antivirus regime B (barriers to work on the part of the employer)
Employers whose employees could not perform work due to obstacles on the part of the employer (reduction of traffic due to downtime due to COVID-19, introduction of partial unemployment due to reduced demand for goods and services due to COVID-19 or in case of reduction or closure due to lack of workers ) may continue to benefit from a regime B Antivirus Program.
The contribution can be drawn in the amount of 60% of the paid wage compensation (including levies), up to the amount of CZK 29,000 per employee per month. The employer can apply for a financial contribution until the end of August of this year.
The contribution will be drawn based on a framework agreement concluded with the Labour Office and subsequent billing for specific months. The employer cannot draw this type of contribution on an employee working on the basis of work performance agreement or agreement on work activity. The allowance may not be claimed for salaried employees or for employees whose salary is paid from other public sources.
Draft of the regime C of the Antivirus program (waiver of social insurance premiums)
The extension of the Antivirus program by regime C was proposed by the Ministry of Labour and Social Affairs as an amendment to the Social Insurance Act, and on 29 May 2020 this draft was approved by the Chamber of Deputies in a state of legislative emergency. The draft will be further discussed by the Senate and subsequently, after being signed by the President of the Republic, the draft should be effective on the day of its promulgation.
The content of regime C is the complete remission of social insurance premiums from the employee’s salary paid by the employer for premiums for June, July and August 2020, ie 24.8% of the employee’s gross salary, for employers employing less than 50 employees. Negotiations are currently underway at the legislative level, which talks about lowering the contribution limit so that even employers with less than 25 employees would be entitled to it.
An employer who decides to use regime C will only notify the Czech Social Security Administration of the reduction of the assessment base in the monthly statement and will pay the reduced insurance premium. It should therefore be a de facto “discount” on the premium, not a retroactive contribution as under regime B.
The condition for application is a commitment that the employer will not lay off more than 10% of employees and at the same time maintain 90% of the wage volume as in March 2020. If the employer has applied for a financial contribution under regime B, the benefits under regime C can no longer be drawn.
Postponement of premium
Every employer, without exception, can benefit from the deferral of social insurance premiums from the employee’s salary (i.e. 24.8% of gross salary) with a reduced penalty of 80% paying for premiums for May, June and July 2020. Premium postponement starts automatically if the employer does not pay the premium within the deadline. The only condition for the use of this benefit is the fact that the employer may not be in arrears as a debtor of the Czech Social Security Administration at the time of the delay.
If you have any questions on this topic, we are at your disposal.
Mgr. Jakub Málek, partner – malek@plegal.cz
Eliška Vetýšková, legal assistant – vetyskova@plegal.cz
10. 06. 2020