On 31 March 2020, the Government of the Czech Republic approved the initial conditions of the Antivirus Program to compensate employees’ salaries compensation for employers affected by the impact or measures related to the coronavirus (COVID-19) pandemic. Although these measures are logical and necessary for the protection of citizens’ health, they also have a negative impact on employers, as they now often cause so-called obstacles to work on the part of the employer restricting the employer’s activity.
Even in case of emergency measures, an employer is obliged to proceed in accordance with Act No. 262/2006 Coll., the Labour Code, as amended (hereinafter the “Labour Code”). According to the Labour Code, the employer is obliged to provide employees with salaries for the duration of the obstacles to work. Compliance with this legal obligation however consists of considerable costs for the employer. Moreover, such obstacles to work are not objectively caused by the employer, but are caused by crisis measures of the Government, respectively by force majeure.
Being aware of the burden on employers due to these measures, the Ministry of Labour and Social Affairs (MoLSA) has developed the so-called “Antivirus” program, the purpose and aim of which is to support employers and employees who were indirectly affected by the measures of the Government related to the COVID-19 epidemic. This program was approved by the Government on 19 March 2020 and on 23 March 2020 the Government approved its further amendment in the context of employment protection. The latest and most recent amendment of the Antivirus program was approved by the Government on 31 March. The program is intended to contribute to a better management of the situation while preventing collective redundancies.
The State should start to compensate salary costs of employers meeting the conditions of the program and falling within the established modes through the Labour Office. Contributions compensating salaries paid by the employers incurred from 12 March 2020 until the end of April 2020 shall be reimbursed, whereas the aforementioned period may be extended by a decision of the Government of the Czech Republic. Refunds should be made on a monthly basis retrospectively according to payroll reports and documented evidence on the basis of an electronically submitted application, starting 6 April 2020.
Contributions should cover almost all obstacles to work on the part of the employer (quarantine, closure of operation, downtime, partial unemployment).
The amount of compensation to employers is derived from the average super-gross wage, including payments to state (CZK 48,400), the duration of contributions itself will depend on the reason for the obstacle to work which will vary from case to case.
Fundamental conditions published for eligibility
In order to participate in the Antivirus program, the employer must in particular:
- strictly complies the Labour Code;
- pay the salary and statutory payments to the state;
- duly and in accordance with the methodology of the Labour Office of the Czech Republic and MoLSA
- apply for compensation and fulfil the formal conditions of the application;
- fall within the business sector.
Employee receiving State contribution under the programme:
- must not be in the notice period;
- must not be dismissed;
- must be employed and participate in sickness and pension insurance.
Individual Government-approved modes of the Antivirus program
MODE A – Closure of operation/production site and quarantine (80% compensation)
Impact: Employees who were prevented from working due to quarantine (Sections 191 and 347(4) of the Labour Code) or due to closure of an establishment in connection with crisis measures (Section 208 of the Labour Code).
Compensation for employees:
- in the case of obligatory quarantine ordered by the attending physician or hygienist, the employee receives salary compensation equal to 60% of the average reduced earnings for the first 14 days (as well as temporary incapacity for work)
- in case of closure of an establishment on the basis of emergency measures, the employee receives salary compensation equal to 100% of the average earnings for the duration of the obstacle.
Refunds to employers: In both cases, the employer’s contribution is 80% of the paid salary compensation, including payments to state (super-gross wage).
Limitations: Maximum of CZK 39,000 per month per employee (super-gross wage).
If the employee has been put into quarantine, the employer pays 60% of the employee’s average reduced earnings for the first 14 days of the quarantine. If the employer has been forced to close an establishment (restaurant(s), swimming pools, solariums, fitness centres, shopping centres) on the basis of a Government resolution, the employee is entitled to a compensation of 100% of the average earnings. However, under the scheme, the employer will be paid a contribution of 80% of the paid salary in both cases, maximum CZK 39,000 per employee per month.
MODE B – Related economic difficulties (60% compensation)
Impact: Employees who are not able to work due to an obstacle to work on the part of the employer due to related economic difficulties due to the spread of coronavirus (a significant proportion of employees did not arrive at work – Section 208 of the Labour Code, lack of subcontracting – Section 207 let. a) of the Labour Code or demand decreased – Section 209 of the Labour Code)
Compensation for employees:
- in case of limitation of operation/production site (closure) for lack of workers due to obligatory quarantine or childcare of a significant proportion of employees (30% or more), where the employee receives 100% of the average earnings for the duration of the obstacle;
- in the case of a reduction of the availability of inputs (raw materials, products, services) necessary for the activity, when the concerned employee receives compensation of 80% of the average earnings for the duration of the obstacle;
- in case of the reduction in demand for employer’s services or products (partial unemployment), when the employee according to an agreement with the trade union receives compensation of 60% of the average earnings for the duration of the obstacle, and if there is no trade union at the employer, then according to the internal regulations of the employer
Refunds to employers: In all cases, employer’s contribution is 60% of the paid salary compensation, including payments to state (super-gross wage).
Limitations: Maximum of CZK 29,000 per month per employee (super-gross wage).
This mode affects situations where the obstacle to work is on the part of the employer results in limitation or closure of operation/production site due to quarantine or childcare, which concerns or affects a significant proportion of its employees (according to MoLSA, significant part means 30% of employees of companies, establishments or other organizational parts, depending on the employer’s operational situation), due to the lack of production inputs (raw materials, services, etc.) as these are not supplied to them by suppliers affected by quarantine, or due to quarantine measures taken both domestically and abroad, which results into very limited demand for products or services. As regards employees, they will be paid from 60% to 100% salary as appropriate (see above). Employers’ state contribution will cover 60% of salary compensation paid, but even here the maximum amount of the contribution per employee is CZK 29,000 per employee per month.
The submission of applications will be completely electronic, through the application. The employer will be able to claim a refund from the Labour Office after the payment of salaries and execution of payments to state at the end of the reporting period, i.e. after the end of the calendar month for which the claim is due, but not earlier than 6 April 2020.
It can be expected that the employer will have to conclude a contribution agreement with the Labour Office, the terms of which should be known soon but will not be negotiated. On the basis of the concluded agreement, the employer will submit an application for a particular paid month, retrospectively, when supporting the application with the documentation required by the Labour Office under the terms of the programme.
With regard to the documentation to be provided, it can be expected to include:
- an overview of the salaries paid per employee, indicating the mode and the legal assessment of the obstacle within the framework;
- documentation demonstrating the legality of the application of the legal reason for the obstacle to work;
- maybe even the evidence of indebtedness towards the state.
MoLSA assumes that there will be a delay of only a few days between the submission of an application and the payment of a contribution by the Labour Office, however, the Labour Office has up to 30 days from the submission to complete the payment without a defective application.
More detailed information, including the methodology of the Antivirus programme, should be published in the following days. We will continue to monitor the situation regarding the refund under the Antivirus programme and keep you informed of its progress.
If you have any questions, please do not hesitate to contact us at any time.
JUDr. Jáchym Stolička, junior lawyer – firstname.lastname@example.org
Veronika Pečová, legal assistant – email@example.com
Mgr. Jakub Málek, partner – firstname.lastname@example.org
01. 04. 2020