3rd group contribution provision - The first state aid to employees, entrepreneurs and sole traders

The Notification is published in Slovak on following websites: https://www.pomahameludom.sk and https://www.neprepustaj.sk. Respective updates are outlined in italics.

Information stated below is of general nature and does not necessarily consider specific conditions of your case. For assistance in your specific case, please, do not hesitate to contact us.

Who is eligible for the contribution provision

The aid is therefore assigned to four groups of employers and self-employed persons:

• First group: employers and self-employed persons (as employers), who had to close their operational premises on basis of Public Health Authority decisions,
• Second group: self-employed persons whose sales dropped or they were forced to suspend or restrict their self-employment activities on basis of the Public Health Authority   
• Third group: employers, who will maintained job positions during the time of declared emergency situation, event if they were forced to stop or suspend their business activities.
• Fourth group: natural person that have no income from 13th March 2020 (originating either from business activity, non-business or dependent activity)

Type of aid for the 3. GROUP 

Entitled applicants

Third group of state aid consists of employers (with exception of public administration entities), including self-employed persons who are also employers, who maintains job positions during the ES even though they suspended or restricted performance of their operational activity (only as the “employer”). Target group consists of employers in employment relationship. 

The employer is considered to be: 

• legal person having its registered seat or seat of its organizational unit in the Slovak Republic, or natural person having its permanent residence in the Slovak Republic and at the same time is employing natural person in employment relationship or other similar relationship, 
• branch of a foreign legal person or foreign natural person with labour law subjectivity, entitled to carry out business activities in the Slovak Republic pursuant to the special regulation,
• legal or natural person performing its business activities pursuant to the special regulation, especially procurement of employment for payment, temporary employment, employment support, provision of professional advisory services, provision of education and training for job-seekers, job-candidates and for employees in the Slovak Republic

Basic conditions for contribution provision

What must employer fulfil?

• Employer is obliged to pay a salary or a salary compensation to employees according to respective provisions of the Labour Code.
• Employer cannot terminate employment relationship with employee/employees by the notice or by the agreement for reasons stated in Section 63, par. 1, letters a) and b) of the Labour Code in the period of that two months after the month for which the contribution is provided.
• Employer is a subject established and performing business activities no later than from 1 February 2020.
• During contribution provision, the employer can increase number of employees, but no contribution shall be granted for new employees.
• During contribution provision, the employer cannot allocate the employee for who the contribution is granted to other operational premises, if the employer has more operational premises.

FOR which employees will the contribution be provided?

• For the purposes of contribution provision, the term employee means only an employee in employment relationship. 
• Contribution shall be provided only for employees whose employment relationship commenced on 1st March 2020 at the latest.
• Contribution shall not be provided for employees whose employment relationship is based on agreement on work outside employment, for the managing director working without an employment contract or shareholder working for its company without the employment contract, cooperating persons – e.g. wife, children, parents who pursuant to the Act on Illegal Work do not have to be in employment relationship, persons working on basis of agreement pursuant to the Civil Code, volunteers.
• Contribution cannot be provided for the employees who are receiving social security benefits (such as allowance for sick leave, so called PN or care for family member, so called OČR) or who are taking their holiday. 
• Employer can apply for contribution only for employees in employment relationship and at the same time are not in the notice period at the day of application submission.
• The contribution shall not be provided to maintain job position of employees, to employment of which was for some period granted other type of contribution either for wage or for total cost of labour within AOTP (active labour market measures), except contribution for job position pursuant to the Section 53d of Act on Employment Services, while fulfilling following conditions:
  • maximum intensity of aid established by relevant guidance and regulation on group exceptions, and at the same time
  • maximum intensity of aid stated in relevant decision of Commission and on other compatible aid.

Amount of the contribution

The employer from the third group shall choose only one of the options for the whole period during which the contribution will be provided, i. e. between a payment of salary compensation (see point I. below) or flat-rate contribution (see point II. below). Provision of contribution on the basis of the measure 3A and 3B simultaneously is not possible.

I. Payment of salary compensation

The amount of the payment of the salary compensation shall be determined according to the following rules:

1. The financial contribution is provided for payment of the salary compensation to employees, to whom employer cannot assign work because of work obstacle on the part of employer (Section 142 of the Labour Code), amounting to 80% of employee’s average salary. This amount shall not exceed EUR 880.
2. Employer who, under a collective agreement or a written agreement with employee representatives (Section 142 Subsection 4 of the Labour Code) has paid to employees the compensation of less than 80% of their average salary, shall be reimbursed for respective term of 2020, but not more than EUR 880.
3. Employer who, in accordance with the amended Labour Code, has paid to its employees the compensation of more than 80% of their average salary shall be paid a reimbursement in the amount of 80% of the employee's average salary for the respective period, but not more than EUR 880.
4. If salary compensation (already paid or payable by the employer by the end of the calendar month in which the application is submitted) is less than EUR 880 the contribution shall be at most equal to the actual wage compensation paid.

II. Flat-rate contribution 

Flat rate contribution for compensation of a part of wage costs for each employee according to sales drop in the amount pursuant to the tables for second group, i.e.: 

Monthly amount of flat rate contribution is 80% of gross monthly salary per one employee. This amount shall not exceed the fixed flat-rate contribution according to the sales drop in accordance with the table above. 

How to calculate the sales drop

The applicant choses one of the alternatives for contribution calculation: 

1. Sales for the respective month shall be compared with the sales for the same month of the previous year (e.g., respective period 04/2020 - previous is 04/2019)
2. Sales average for 2019 (i.e. 1/12 of sales for 2019) shall be compared to respective month. Entitled are only applicants performing their business activity during all 2019
3. Sales for February 2020 shall be compared to the Sales for respective month – entitled are only those who were performing business activity for the part of 2019 and started to perform business activity no later than 1.2.2020.

If applicant has more operations, sales are compared within one ID number, regardless if applicant applies for contribution for drop in sales in one or multiple operations.

For the provision of the contribution according to the Section II, the employee is: 

• employee to whom the employer can assign work, as well as
• employee to whom the employer cannot assign work due to work obstacle on the part of employer (Section 142 of Labour Code).

The condition for the contribution provision according to the Section II, is that that the employee has not more than 50% of his monthly working time fund an obstacle on the part of the employee or has not taken a holiday.

Filling an application - procedure

The application form with identification A or B (depending on the type of contribution) is available on https://www.pomahameludom.sk and also on https://www.neprepustaj.sk (available only in Slovak). 

In case, the employer fulfils condition for provision of contribution within two measures from the Project in one calendar month, the application shall be submitted pursuant to the measure within which the employer has more number of calendar days.

If the employer has only one operation, it is possible to apply for contribution only within one measure for one month.

If the employer has two or more operations, it is possible to apply for contribution for one month within measure 1 and at the same time measure two, but for different premises.

The employer submits the application to the respective Office of Labour, Social Affairs and Family (hereinafter referred to as the “office”), determined according to the district where the job positions are maintained. In case the employer has more than one operations, the application shall be submitted to the Labour Office determined according to the district in which the employer has its registered office.

Mandatory Annex to the application is a report for contribution provision. More information on how to complete such report is available for category A in respective Manual available in Slovak

Group 3/A -  Manuál k vypĺňaniu žiadosti A pre priznanie príspevku

Group 3/B -  Manuál k vypĺňaniu výkazu B pre priznanie príspevku

Part of the application consists from a declaration in which the employer declares that: 

• Employer pays to its employees the salary or the salary compensation in the amount pursuant to the respective sections of Labour Code.
• Employer does not claim the contribution for employees in notice period or employee receiving social security benefits due to obstacles to work on the part of the employee.
• Employer does not request the contribution for employees already receiving other salary contribution/total labour cost within the active labour market measures provided by Office of Labour, Social Affairs and Family.
• Employer does not request the contribution for employees employed after 2 March 2020.
• During the period of two months after the month for which the contribution is being provided, employer shall not terminate the employment relationship by the notice or agreement for reasons stated in Section 63, par. 1, letters a) and b) of the Labour Code.
• Employer meets the conditions stipulated in Section 70, par. 7 of the Act on Employment Services by following: 
  • Employer fulfils tax obligation pursuant to the Act No. 595/2003 Coll. on Income taxes, as amended,
  • Employer fulfils the obligations to pay advance public insurance levies, social insurance levies and obligatory old-age pension savings contributions,
  • Employer is compliant with the prohibition of illegal employment for a period of two years prior to applying for the contribution,
  • Employer does not have unpaid financial obligations towards the Labour Office,
  • it has not been declared bankrupt or wound up, has not been in receivership and does not have a reimbursement schedule pursuant to special regulations,
  • There are no outstanding claims of employees arising from their employment,
  • It is not prohibited to receive subsidies or to receive aid and assistance provided from EU funds, in case the employer is a legal person;
• There are no outstanding claims against this employer for repayment of aid on basis of former decision of European Commission declaring aid illegal and incompatible with the internal market.
• Employer is a subject existing from and started to carry out its business activities on 1 February 2020 at the latest. 

The facts declared honestly by the applicant may be subject to ex-post controls.

By confirming correctness and verity of submitted data in the application and its annexes, the applicant shall be aware of consequences due to false declaration of the abovementioned facts, including criminal consequences (Section 221 Fraud, Section 255 Subsidy Fraud, Section 261 Damage to the Financial Interests of the European Union pursuant to the Penal Code No. 300/2005 Coll. as amended)

The application shall be submitted without signature and it shall be submitted by electronic post (mail) or electronically by electronic mailbox (as a priority). In exceptional cases, the application can be sent by post office or delivered personally. 

The application for May 2020 shall be submitted until 31 July 2020. The employer submitting application for April or May shall submit the application by the end of calendar month, following the month for which the compensation is required. 

ATTENTION!

Employers can already change the contribution under measure 3. If you want to switch from 3A to 3B or vice versa, you must submit a new application for the measure and at the same time notify the Authority of the termination of the original agreement. It is also possible to provide a contribution in parallel under measures 3A and 3B, but for other establishments.

Applications and statements under the measure 3 (3A, 3B) for the month of Jun can be sent no later than 31 August 2020.

Agreement of provision of financial contribution – signing and delivery 

The contribution shall be provided to the employer without delay on basis of Agreement on provision of financial contribution (hereinafter referred to as the “Agreement”), which is sent by the office after delivery of application and control of its formal requirements.

If the Agreement is sent to the employer via post office, it is delivered in two counterparts, one for each party to the Agreement. The office sends already signed Agreement to the employer. The employer shall subsequently sign the Agreement and send one counterpart also by post (in exceptional cases personally) back to the office. Second counterpart is for the employer.

If the employer has active electronic mailbox for delivery, the office sends signed Agreement electronically through electronic mailbox. The employer signs this Agreement by certified electronic signature and sends it back to the office via portal www.slovensko.sk. 

Please note, that the office will not accept documents signed by two methods at the same time. In other words - if the office signed the Agreement electronically, the employer cannot print the Agreement and sent it by the post, but it has to be also signed electronically.