Native content supported by Grecu & Asociatii.

Kurzarbeit - Can the success story of Germany be repeated in Romania as well?

24 August 2020

Kurzarbeit, in translation “short work” is the German solution for the labor market in times of major economic crisis. The institution appeared more than 100 years ago and was used during the two world wars, but its real international breakthrough came during the economic crisis of 2008-2009, when the Organisation for Economic Cooperation and Development estimated that almost 200,000 jobs were saved due to its implementation.

The German model was also approved by the European Commission which recently launched the SURE program, intended to reimburse expenses incurred by states for certain categories of active measures, especially for Kurzarbeit-type measures.

The operating mechanism of Kurzarbeit is a simple one, the state bears a percentage of the difference between the gross basic salary provided in the individual employment contract and the gross basic salary for the hours actually worked by the employees, for the companies that apply.

This is a win-win situation for all parties involved. On the one hand, the employer keeps its employees and has a better chance of coping with the economic crisis. At the same time, the employee manages to keep his job and has at his disposal a higher income than the one corresponding to the reduced working time and the state keeps a low level of expenses by collecting taxes and duties from the income that the employee register.

How the Kurzarbeit concept was implemented in Romania?

On August 10, 2020 was published the Government Emergency Ordinance no. 132/2020 on the establishment of support measures for employees and employers in the context of the epidemiological situation caused by the spread of SARS-CoV-2 coronavirus, as well as to stimulate employment growth. Mainly, it describes a Romanian version of the Kurzarbeit model, a solution proposed in the context of the economic difficulties that companies are going through.

These provisions are addressed to employers whose activity has been temporarily reduced as a result of the establishment of the state of emergency / alert / siege, being offered the possibility to unilaterally reduce the working time of employees by no more than 50% of the duration provided in the individual contract.

The reduction of working time must be done with the information and consultation of the trade union, employees' representatives or employees. Regarding the communication of the employee's decision, this must be made at least 5 days before the effective application of the measure, and the change must be recorded in the general register of employees at least one day before its occurrence.

During the reduction of the working hours, employees affected by this measure receive an allowance of 75% of the difference between the gross basic salary provided for in the individual employment contract and the gross basic salary for the hours actually worked. This allowance complements the due salary rights, calculated at the actual time worked.

Employers have the opportunity to apply simultaneously both for this allowance and for other benefits granted by the state, but for different employees.

The reduction of the work schedule can be applied also in the situation of the shift work schedule or unequal work schedule.

Who makes the payment in the first place?

This indemnity will be paid by the employer, to be settled by him from the unemployment insurance budget, after the payment obligations related to the period for which the settlement of the amounts will be requested have been declared and paid.

What are the criteria for granting the allowance for reducing the work schedule?

In order to have the measure to reduce working time and to be able to request the settlement of the allowance, the employer must cumulatively meet the following conditions:

• the measure affects at least 10% of the number of employees of the unit;

• the reduction of the activity is justified by a decrease in turnover from the month prior to the application of the measure or, at most, from the month before the month preceding it, by at least 10% compared to the similar month of the previous year;

• the reduction of the working hours is established for a period of at least 5 consecutive working days. There is also the obligation for the employer to establish the working hours for the whole month.

Restrictions and Penalties

During the period in which this measure applies, the employer does not have the right to hire staff to perform activities identical or similar to those of employees for whom the measure to reduce the work schedule has been ordered. This prohibition is also reported at the level of branch, subsidiary or other secondary offices.

It is forbidden to employers to subcontract activities carried out by employees whose working time has been reduced or to allow additional work to be performed by them.

The employee whose working time has been reduced may not be subject to the measure of reducing the working hours from 5 days to 4 days per week, with the corresponding reduction of the salary, for periods longer than 30 working days, according to the provisions art. 52 paragraph 3 of the Labor Code. Likewise, employers cannot grant bonuses and / or other additions to the basic salary to those who hold positions in the management structure.

If the measure to reduce working time is applied and working hours are provided for the employer who ordered this measure, in addition to or in telework or work at home outside normal working hours, this represents a contravention and is sanctioned with a fine of RON 20,000 for each employee identified in this situation, without exceeding the cumulative value of RON 200,000.

This is native content supported by Grecu & Asociatii.

Normal

Native content supported by Grecu & Asociatii.

Kurzarbeit - Can the success story of Germany be repeated in Romania as well?

24 August 2020

Kurzarbeit, in translation “short work” is the German solution for the labor market in times of major economic crisis. The institution appeared more than 100 years ago and was used during the two world wars, but its real international breakthrough came during the economic crisis of 2008-2009, when the Organisation for Economic Cooperation and Development estimated that almost 200,000 jobs were saved due to its implementation.

The German model was also approved by the European Commission which recently launched the SURE program, intended to reimburse expenses incurred by states for certain categories of active measures, especially for Kurzarbeit-type measures.

The operating mechanism of Kurzarbeit is a simple one, the state bears a percentage of the difference between the gross basic salary provided in the individual employment contract and the gross basic salary for the hours actually worked by the employees, for the companies that apply.

This is a win-win situation for all parties involved. On the one hand, the employer keeps its employees and has a better chance of coping with the economic crisis. At the same time, the employee manages to keep his job and has at his disposal a higher income than the one corresponding to the reduced working time and the state keeps a low level of expenses by collecting taxes and duties from the income that the employee register.

How the Kurzarbeit concept was implemented in Romania?

On August 10, 2020 was published the Government Emergency Ordinance no. 132/2020 on the establishment of support measures for employees and employers in the context of the epidemiological situation caused by the spread of SARS-CoV-2 coronavirus, as well as to stimulate employment growth. Mainly, it describes a Romanian version of the Kurzarbeit model, a solution proposed in the context of the economic difficulties that companies are going through.

These provisions are addressed to employers whose activity has been temporarily reduced as a result of the establishment of the state of emergency / alert / siege, being offered the possibility to unilaterally reduce the working time of employees by no more than 50% of the duration provided in the individual contract.

The reduction of working time must be done with the information and consultation of the trade union, employees' representatives or employees. Regarding the communication of the employee's decision, this must be made at least 5 days before the effective application of the measure, and the change must be recorded in the general register of employees at least one day before its occurrence.

During the reduction of the working hours, employees affected by this measure receive an allowance of 75% of the difference between the gross basic salary provided for in the individual employment contract and the gross basic salary for the hours actually worked. This allowance complements the due salary rights, calculated at the actual time worked.

Employers have the opportunity to apply simultaneously both for this allowance and for other benefits granted by the state, but for different employees.

The reduction of the work schedule can be applied also in the situation of the shift work schedule or unequal work schedule.

Who makes the payment in the first place?

This indemnity will be paid by the employer, to be settled by him from the unemployment insurance budget, after the payment obligations related to the period for which the settlement of the amounts will be requested have been declared and paid.

What are the criteria for granting the allowance for reducing the work schedule?

In order to have the measure to reduce working time and to be able to request the settlement of the allowance, the employer must cumulatively meet the following conditions:

• the measure affects at least 10% of the number of employees of the unit;

• the reduction of the activity is justified by a decrease in turnover from the month prior to the application of the measure or, at most, from the month before the month preceding it, by at least 10% compared to the similar month of the previous year;

• the reduction of the working hours is established for a period of at least 5 consecutive working days. There is also the obligation for the employer to establish the working hours for the whole month.

Restrictions and Penalties

During the period in which this measure applies, the employer does not have the right to hire staff to perform activities identical or similar to those of employees for whom the measure to reduce the work schedule has been ordered. This prohibition is also reported at the level of branch, subsidiary or other secondary offices.

It is forbidden to employers to subcontract activities carried out by employees whose working time has been reduced or to allow additional work to be performed by them.

The employee whose working time has been reduced may not be subject to the measure of reducing the working hours from 5 days to 4 days per week, with the corresponding reduction of the salary, for periods longer than 30 working days, according to the provisions art. 52 paragraph 3 of the Labor Code. Likewise, employers cannot grant bonuses and / or other additions to the basic salary to those who hold positions in the management structure.

If the measure to reduce working time is applied and working hours are provided for the employer who ordered this measure, in addition to or in telework or work at home outside normal working hours, this represents a contravention and is sanctioned with a fine of RON 20,000 for each employee identified in this situation, without exceeding the cumulative value of RON 200,000.

This is native content supported by Grecu & Asociatii.

Normal
 

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