The Croatian Government job preservation measures – important update
Tax News, March 2020
Aid for job preservation – important update
Croatian employment agency has published the following important update related to aid for job preservation:
- Requests for the aid received until 5 April 2020 23:59 will be subject to approval relating to salaries for March, April and May 2020
- Requests for the aid received between 6 April and 5 May 2020 until 23:59 will be subject to approval relating to salaries for April and May 2020
- Requests for the aid received between 6 May and 5 June 2020 until 23:59 will be subject to approval relating to salaries for May 2020
The Croatian Government job preservation measures
Croatian Employment Service has issued measures that would preserve jobs due to the special circumstances of COVID-19 pandemic.
- Employers engaged in following industry are considered to be vulnerable for the purposes of being entitled to support arising from these measures
- accommodation activities and food and beverage,
- transport and storage,
- labour-intensive industries within the manufacturing industry - textile, clothing, footwear, leather, wood and furniture
- employers who cannot perform the activity in accordance with the decisions of the Civil Protection Headquarters of the Republic of Croatia
- and other employers who can prove the impact of special circumstances.
- The measures do not apply to business entities founded by the Republic of Croatia, countries and local self-government units with the state ownership interest of 25% of more (with exception of employers in Sector C Manufacturing and Sector I Accommodation, food preparation and service activities.
- Employees employed by employers in these sectors do not include owners, co-owners, founders, board members, directors, procurators and similar managers.
The period and duration of measures is determined for the period starting from March 1, 2020 and further, up to three months. The planned payment of the respective measures is by the 15th of the respective month for the previous month. The amount of HRK 3,250 will be paid monthly per full-time worker and HRK 1,625 per part-time worker and a proportionate portion of 3,250 HRK or 1,625 HRK per employee for time not worked under the Decision of the Civil Protection Headquarters of the Republic of Croatia.
- Criteria for this measure:
- loss of turnover bigger than 20%
- cancellation of reservations, events, congresses, etc.,
- cancellation of contracts and orders,
- inability to deliver finished products or contracted and paid raw materials, raw materials, machinery, tools, etc.,
- impossibility of new orders of raw materials, tools and machines necessary for work,
- the employer also lists the activities he has undertaken to preserve jobs.
- The measures will not be applicable for employers if there was a headcount drop in the period from March 20, 2020 to the date of application resulting with the employment rate drop more than:
- 40% for employers employing up to 10 workers,
- 20% for small businesses,
- 15% for medium-sized enterprises,
- and 10% for large enterprises.
- For justifiably terminated employment contracts, which include the expiration of a fixed-term contract, contractual dismissal at the request of an employee, personal conditional dismissal, retirement of an employee and dismissal due to the employee's misconduct, the employer is entitled to payment according to the days worked by the person in the month of dismissal. Employers who are granted support for job preservation may not import foreign labor or hire new workers during the period of application of this measure. In period of receiving this payments under this measure, the employer should not import foreign labour or hire new workers during the application of this measure.
If the employment contract is terminate on employers’ request, the employer will not receive the support from this measure for the last working month or the days due for payment for the employee whose employment contract is terminated.
- Employer should provide evidence of paid salaries to employees for whom he claims the support with list of employees for who he claim support. Employee list should contain signatures all employees that confirms receiving of salary.
- In the application, the employer should describe the reasons why they are seeking support for job preservation and support it with evidence. The application should be submit online, by e-mail or to the competent Croatian Employment Institution at the employer's headquarters.
- Croatian Employment Service will within 10 days after receiving complete documentation, review the received applications, inform the beneficiary on accepted requests and conclude an agreement of using job preservation measures. Before payment issuance conducted, the Croatian Employment Service will check the employers’ solvency status and check status of employment for employees for which employer is asking support.