The impact of the coronavirus pandemic on labour law - 5/2021

Current measures valid as of 30 April 2021:

• The establishments of shops and services (restaurants, shops, sports and cultural facilities, etc.), schools, theatres, etc. are closed for the long term.
• The operation of schools is limited; from the middle of April the return of students to the first level of primary school was permitted in a rotational regime and preschoolers in maternity schools were also allowed to return. Other students are educated remotely through distance learning. The testing of students using antigen tests takes place 2 times a week in schools; the students are not allowed to enter the school without taking the test.
• The right to assemble is limited; at most 100 participants can assemble in groups of 20 while maintaining a distance of at least 2 m between the groups
• The holding or mass events is restricted, the basic rules permit the participation of at most 2 people, with possible exceptions
• The free movement of people who have come from abroad is prohibited until the results of a PCR test performed in the Czech Republic
• Entry to the Czech Republic is prohibited to citizens of third countries that are high risk
• The wearing of respirators is required in the built-up areas of towns and cities and in all internal spaces
• Employers are obliged to test their employees and to equip each shift with a sufficient amount of protective equipment and home office is recommended for employees for whom the nature of their work permits it.

You can find all the information on the valid measures in the Czech and English languages at the website https://covid.gov.cz.

Mandatory testing of employees

From 1 March 2021, the testing by employers was gradually ordered: first for employers with 50 or more employees and from 26 March for employers with 10 or more employees, as well. The employer is obliged to ensure that no untested employees have access to the working premises. From 6 April 2021, this obligation has also been imposed on companies with at least 1 employee as well as on self-employed persons. 

The employer

• cannot force an employee to arrange for a test themselves
• acquires the tests in the standard distribution network, i.e., in bulk directly from a distributor or, for example, in a pharmacy. The tests must include instructions in the Czech language
• must store the invoice for the purchased tests - it can subsequently be the subject of an inspection on the part of the health insurance companies for the purpose of providing contributions from the prevention fund
• does not have to perform tests for people that have had Covid-19, provided quarantine no longer applies to them and no more than 90 days have passed from their first positive test; these facts are demonstrated by a medical report
• shall designate a suitable space for testing in the workplace
• if the test is performed in the home environment, the employee performs it before leaving for work
• the testing will take place at least once every seven days
• result of the test: if it is negative, the employee continues with his/her regular work, if it is positive, the employee has to inform the employer of this fact, must not enter the workplace and must contact his/her doctor by phone (the further steps are according to the doctor’s determination)

The health insurance companies at which the tested employees are registered pay the employers on the basis of completed and submitted requests for contributions for the purchased tests to a maximum of 4 tests per employee per month. The amount of the contribution for one test amounts to CZK 60, thus the maximum monthly contribution is CZK 240.

Current valid support provided in the Czech Republic in the area of employment

As a result of the crisis measures adopted as part of the preventative steps against the spread of the coronavirus pandemic, during which some business activities were limited or completely banned, the government is gradually implementing several programmes with the goal of helping the affected segments. In this text we will focus on support in the area of payroll compensation.

The Antivirus Programme is the main support for maintaining employment. This should help employers protect jobs and compensate part of the payroll expenses for the employees, if their activities were threatened as a result of the coronavirus. The Antivirus Programme is valid from the end of March 2020 and it was possible to request compensation for eligible expenses for the period starting from 12 March 2020. The Antivirus programme is currently extended to 31 May 2021. Labour offices pay the employers the compensation for the payroll expenses.

Antivirus has multiple modes: mode A, mode B and mode A Plus, and they are primarily differentiated by the reason for the obstacles to work and the related amount of the contribution provided to the employees. The employer is fully responsible for the specification of the relevant obstacles to work and the adherence to the relevant provisions of the Labour Code. The State Labour Inspection Office (SLIO) is responsible for the inspection of their adherence.

Mode A: Forced operation restriction and quarantine

• applies to companies to which the forced restriction of operations occurred on the basis of the government’s crisis measures or the ordering of quarantine by the hygienist (obstacles on the part of the employer or on the part of the employee)
• an eligible expense is the compensation of wages paid to employees due to ordered quarantine (pursuant to Section 192 of the Labour Code)
• the compensation amounts to 80% of the eligible expenses (the compensation of wages paid to employees and the corresponding amount of statutory deductions), though to a maximum of CZK 39,000 per employee per month
• the maximum amount of the contribution is not reduced in relation to the duration of the obstacle to work nor is it reduced for the given month according to the period of eligibility of the expenses.

Mode B: Related economic difficulties

• applies to cases of obstacles to work on the part of the employer incurred as a result of related economic difficulties caused by COVID-19
• these are cases where the employer cannot assign work to the employees, especially if:
  • it is forced to limit operations since it is lacking entry supplies (e.g., raw materials, semi-finished goods) - an obstacle to work on the part of the employer pursuant to Section 207 (a) of the Labour Code; the employees are entitled to compensation of wages in the amount of at least 80% of their average earnings
  • or the demand for the products or services it provides was significantly limited - an obstacle to work on the part of the employer pursuant to Section 209 of the Labour Code; the employees are entitled to compensation of wages in the amount of at least 60% of their average earnings (this must be specified in an agreement with a trade union and/or internal regulations)
• the compensation amounts to 60% of the eligible expenses (the compensation of wages paid to employees and the corresponding amount of statutory deductions), though to a maximum of CZK 29,000 per employee per month
• the maximum amount of the contribution is not reduced in relation to the duration of the obstacle to work, nor is it reduced for the given month according to the period of eligibility of the expenses.

Mode A Plus:

• this is meant for those employers whose employees could not perform their work due to other obstacles to work on the part of the employer pursuant to Section 208 of the Labour Code resulting from a direct ban (or significant restriction) of the employer’s operations (activities) by the government’s crisis measures or extraordinary measures of the Ministry of Health or public health authorities, if such obstacles to work don´t arise before 1 October 2020
• this is similar to mode A, though does not apply to cases where quarantine or isolation was ordered for the employee
• the contribution is only provided for the period when such obstacles to work endured, i.e., just in the scope in which the relevant activity was restricted or banned by the restrictive measures; it can be combined with mode A
• the compensation amounts to 100% of the eligible expenses (compensation of the wages paid to the employee for the duration of the obstacle to work + the corresponding amount of statutory deductions)
• the maximum amount of the compensation amounts to CZK 50 000 per employee; if the employer will ask for a contribution for the same owner in the same month in both mode A and mode A Plus, the maximum amount of the compensation totals CZK 50,000

It is necessary to fulfil several conditions in order to qualify for the compensation:

• the employer strictly adheres to the Labour Code;
• the employee must not be in a notice period nor can the employee be dismissed;
• it applies to companies in the business sphere, employees must be in an employment relationship and they must participate in sickness and pension insurance;
• the employer must pay the wage to the employees and pay the statutory insurance for public health insurance and for social security and the contribution to the state employment policy on behalf of the employee and on behalf of the employer by the proper deadline.

Foreign legal entities can also enter the Antivirus Programme if they have employees employed according to Czech law and fulfil the other conditions for the Antivirus Programme.

The employer can submit the accounting after it pays the compensation of the wages and pays the statutory deductions.

Employers are not entitled to compensation

• for the payment of expenses incurred on the basis of supplementary forms of employment relationships, thus agreements for work performed outside of employment. Therefore, it is not possible to request compensation for employees working on the basis of agreements to perform work or fixed work agreements.
• if the employer gave an employee notice or the employment was terminated in the period when the accounting was submitted
• for an employee for which the employer received another contribution from the Labour Office
• the contribution cannot be provided to an employee who is also the company’s Executive or a member of the employer's statutory body, if the employment contract was signed by the same person both on the part of the employer and the employee
• if the compensation of the wages is covered by another public budget (e.g., other funds provided by the state budget, the budget of the local and regional authorities, higher territorial self-governing units, European structural and investment funds, or other EU programmes and projects and other public sources).
• an applicant that is in liquidation or bankruptcy proceedings, an applicant that was fined for permitting the performance of illegal work according to Section 5 (e) (3) of Act No. 435/2004 Coll., on Employment, as later amended, in a period of 3 years before the date the application was submitted

Other conditions are specified for a contribution in A Plus mode, with no entitlement to the contribution if they are not fulfilled:

1. Liquidity - the support is meant to resolve losses of liquidity of the business (employer). For the purposes of the provisioning of a contribution in A Plus mode, however, a loss of liquidity presumes they are entitled to use this mode since they are obliged to pay the employees compensation of wages in the amount of 100% of their average earnings in accordance with Section 208 of the Labour Code at a time when they cannot be assigned work due to crisis or extraordinary measures. The employer does not need to prove these facts in any way, it is a condition for the automatic fulfilment of the employer’s entitlement to request this contribution.

2. Limit – the maximum provided support, i.e., the sum of all the support that the business (employer) and its related businesses receive pursuant to point 3.1 of the Temporary Framework (these include ’COVID-nájemné’ for rent, ’COVID-lázně’ for spas and some projects of the Operational Programme ’Employment’) must not exceed an amount of EUR 800 000. For businesses active in the field of fishing or aquaculture, the amount is decreased to EUR 120 000, while for businesses active in the field of primary agricultural production the amount is decreased to EUR 100 000.

Only support that was provided pursuant to point 3.1 of the Temporary Framework is included in the limit, other public support provided, for example, according to “block exceptions” or “de minimis” support is not included, nor is support provided according to other points of the Temporary Framework. This means that the contributions provided from the Antivirus Programme in modes A and B are also not included in the limit. 

Direct support for employees:

1. Crisis care-giver’s allowance

The right to the care-giver’s allowance due to the limited operation of schools, school facilities and preschools is evaluated according to Act No. 187/2006 Coll., on Sickness Insurance, as later amended, and according to Act No. 438/2020 Coll., on the Regulation of the Provision of the Care-Giver’s Allowance in connection with the Extraordinary Measures during the Epidemic.

An employee who cannot perform work in his/her job due to the care for the following has the right to the care-giver’s allowance:

• a child younger than 10 years of age,
• dependent children (though no longer than to 26 years of age) participating in school attendance depending on the care of other persons (already from level I),
• persons older than 10 years of age dependant on the care of other persons using the services of day and week care facilities and similar facilities,
• children who cannot participate in the lessons due to the ordering of quarantine in the family.

People working on an agreement to complete a job or work performance agreement will also be entitled to the care-giver’s allowance under the aforementioned conditions if they pay sickness insurance.

The support period will last for the duration of the extraordinary measures (closing of schools or care facilities, duration of quarantine); the amount of the care-giver’s allowance amounted to 70% of the daily assessment base until now. On 21.4.2021, the Senate of the Parliament of the Czech Republic passed a bill that increases the care-giver’s allowance to 80% of the daily assessment base from 1.3.2021. 

Update - from 12 April 2021, children on the 1st level of primary school have returned to in-person lessons in schools on a rotating system. The children go to school for one week and then one week they are taught through distance learning. With the rotating system, there is no right to the payment of the care-giver’s allowance on the days when the teaching in school is permitted, but it remains in effect on days when distance learning is ordered. When requesting the care-giver’s allowance, the employee specifies the days of the distance learning as days of care, if he/she truly took care of the children. The parents cannot indicate the days when the child was permitted in-person lessons. They are not entitled to the payment of the care-giver’s allowance for these days. 

2. Extraordinary isolation contribution

This is an extraordinary contribution in the amount of up to 370 CZK per day in addition to the compensation of the income of employees in quarantine or in isolation. The main purpose is to contain the spread of the virus and to help employees so that they do not need to fear a significant drop in their income in the case of quarantine or falling ill with the COVID-19 disease.

It is valid from 1 March to 30 June 2021.

The hygiene authorities inspect the adherence to the quarantine or isolation measures, and they may even impose fines for non-adherence to the conditions.

Extraordinary isolation contribution:

• entitlement for a maximum of 14 calendar days, in the amount of up to CZK 370 for each calendar day
• if the sum of the contributions and compensation of wages reaches 90% of the average earnings for the corresponding number of lost hours, the contribution is lowered by this amount
• all employees who have ordered quarantine or isolation due to an infectious disease (Covid-19 or other) from 1 March 2021 and later
• people working on an agreement to complete a job or work performance agreement will also be entitled if they participate in sickness and pension insurance
• it does not apply to employees for whom quarantine or isolation was ordered up to 5 days upon returning from abroad, with the exception of returning from business or work trips
• the employee does not need to apply for anything, but only must announce that he/she is in quarantine or isolation
• the employer pays the extraordinary contribution for the first 14 calendar days of the duration of the ordered quarantine and/or isolation
• employer decreases the monthly payment of social insurance by the amount of the paid contribution
• it is not subject to the judicial enforcement of a decision (distraint deductions), is not included in the income for benefits