Last updated: 1 April 2020
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The Emergency Ordinance of the Government no. 30/2020 laying down the conditions to be met for the payment of the indemnities for technical unemployment by the State has been amended by the EGO no. 32/2020 published in the Official Gazette no. 260/2020.
The new ordinance makes things easier … and, at the same time, broadens the area of potential beneficiaries and the payment means of the indemnity by State.
The beneficiaries thereof are the employees whose employment contacts have been suspended pursuant to article 52 (1) letter c) of the Labour Code as a result of total or partial temporary reduction / interruption of the activity of the employer during the emergency state being declared in Romania.
Note: As compared to the former regulation (EGO 30/2020), in order to benefit from such incentive, the production of the Certificate of Emergency Status issued by the Ministry of Economy, Energy and the Business Environment is no longer requested. At the same time, companies whose activity has been impaired by the crisis no longer have to account for the drop of at least 25% of the turnover during the month of March.
Self-employed individuals (Romanian PFA), representatives of sole proprietorships, liberal professions or natural persons getting revenues from copyrights, who interrupt their activity during the emergency state, can also benefit from the help granted by the State.
THE INDEMNITY FOR TECHNICAL UNEMPLOYMENT
According the art. 53 of the Labour Code, in case of technological unemployment (in normal circumstances, out of the state of emergency) an employee is entitled to receive from their employer 75% of the base gross salary.
In these circumstances of the state of emergency, the indemnity for technical unemployment is paid by the State (if the file is submitted). Such indemnity amounts to 75% of the salary received by the employee, without thus exceeding 75% of the average gross salary established for 2020 (gross LEI 5.429, namely gross LEI 4.071), namely an indemnity amounting around Net LEI 2.400.
The indemnity is paid up the State to the employer within maximum 15 days since the date of filing of the application and the employer must, in his turn, pay it to the employees whose employment agreements have been temporarily intermitted within a 3- business-day term.
If the budget of the employer allows it, then the employer may pay a bonus so that the employee may receive at least 75% of their actual gross salary. Such bonus might be granted to employees whose gross base salary is bigger than the average base salary for 2020.
At the same time, during the state of emergency, the employer may decide to place the employee under technical unemployment and pay an indemnity for unemployment amounting to maximum 75% of the average gross salary in 2020, namely around LEI 2.400 net (without seeking to benefit from the indemnity paid up by the State).
These provisions apply exclusively for the period of the state of emergency, which, unless extended, is due for termination on April 16, 2020.
THE STEPS TO BE TAKEN
In order to benefit of the help granted by the State, the employers shall send, via email, to the local agencies for unemployment or to the Agency for workforce a file comprising:
- An application dated and signed by the legal representative (the template thereof was published in the Official Gazette no. 269/2020);
- A declaration under sole responsibility (the template thereof was published in the Official Gazette no. 269/2020);
- The list of the persons that shall benefit from the indemnity for technical unemployment (the template thereof was published in the Official Gazette no. 269/2020).
The application is to be submitted during the current month for the payment of the indemnity pertaining to the previous month.
1. If an employee has got several employment agreements out of which at least a full time one is active during the emergency state, such employee cannot benefit from the indemnity for technical unemployment.
2. If an employee has got several employment contracts and they are all suspended, than such employee may benefit therefrom for the employment agreement the most advantageous.
As for the steps to be taken by the other category of beneficiaries (self employed individuals (Romanian PFA), the representatives of sole proprietorships, liberal professions or natural persons getting revenues from copyrights) they shall submit their files, via email, to the National Agency for Payments and Social Inspection. The file shall comprise, in this case, a payment request pursuant to the template provided by the State and a declaration under sole responsibility, as well as a copy of the identification papers.
Such request shall be transmitted before the 10th of the current month for the payment of the indemnity pertaining to the previous month. The indemnity shall be paid up directly in the bank account of the beneficiary within maximum 10 days since the filing date. The indemnity is set at 75% of the average gross salary for 2020 (LEI 5.429 in gross, pursuant to EGO 32/2020).
TAX RELATED MATTERS
The employer shall calculate, file returns and pay the income tax (10%) and social charges due by the employees for the amounts accounting for the technical unemployment indemnity. The employer shall pay these amounts from the unemployment insurance fund (paid by the State).
The employer is exonerated of the payment of the insurance contribution (2, 25%).
The payment deadline and filing of tax and social charges returns for the technical unemployment is the 25th of the month following the month during which the employer receives the indemnities from the budget of unemployment insurance budget.
For the record, during the emergency state, the employer may decide upon the unilateral suspension / interruption of the employment contracts for economic grounds as under force majeure. Nevertheless, beware that the COVID-19 pandemic in itself does not constitute sufficient grounds for force majeure. Each case must be assessed individually.
Finally, pursuant to the Labour Ministry, once the state of emergency terminated, one should expect the competent authorities randomly checking the documents provided for the payment of the technical unemployment indemnity.