Last updated: 13 October 2021
- Filed under:
- Legal News
- Mihaela NITU
From October 4, 2021 and until December 31, 2021, employers will once again be entitled to benefit from the technical unemployment allowance granted by the State for the employees whose employment agreements have temporarily been suspended (under article 52 (1) letter c) of the Labor Code), in the context of the Covid-19 crisis.
This relief measure, originally enacted by the GEO no. 30/2020, had been granted by the State from the beginning of the pandemic for business impaired by the pandemic, but it ceased being granted on June 30, 2021 (the GEO 211/2020).
According to the GEO no. 111/2021, published in the Official Journal no. 945 of October 4, 2021, during a calendar month, employers can now claim both the payment by the State of the technical unemployment allowance and the allowance granted under the Kurzarbeit mechanism for employees whose working hours have been reduced by up to 80% due to the pandemic. It is thus possible to combine the two aids, for different periods.
In order to qualify for benefitting of the technical unemployment pay, the employer must fit in one of the following contexts:
- Its activity has been wholly or partially interrupted, due to the surge of cases of infection with the SARS-CoV-2 virus and to the measures adopted by the authorities in relation with the extension of the state of alert in Romania ;
- Its activity was suspended as a result of the epidemiological investigation carried out either by the departmental public health directorates or by the public health directorate of the Municipality of Bucharest, except for the employees who are on sick leave and who receive the corresponding social insurance allowance.
Consequently, in order to benefit of the state relief scheme, the suspension / reduction of the employer's activity must be directly related to the health situation (increase in the incidence of cases of infection) and to the measures taken by the Government to reduce the impact of the virus, whereas economic reasons entailing an interruption / reduction of the activity (for example, a lack of orders) no longer grant access to such relief measures.
The technical unemployment allowance
The technical unemployment allowance amounts to 75% of the employee's basic salary and is paid from the unemployment insurance budget, but shall not top 75% of the average gross salary provided for by the law on State social insurance no. 16/2021.
If an employee has concluded several individual employment agreements, out of which at least one is active while receiving the furlough pay, the allowance of such employees shall not be compensated by the State.
If an employee has concluded several individual employment agreements and all are suspended, such employee shall benefit of the furlough pay by State under the employment agreement which provides the most advantageous wage rights.
Some tax aspects
The technical unemployment allowance:
- Can be supplemented by the employer, if the wages budget allows it;
- Is calculated for the number of days during which the activity was suspended, until December 31, 2021 at the latest;
- Is subject to the payment of tax and compulsory social contributions;
- The calculation, withholding and payment of income tax, social insurance contribution and health insurance contribution fall to the employer and shall be paid from the allowances paid by the insurance budget - unemployment;
- The declaring of income tax, social insurance and health insurance contributions falls to the employer who is bound to file the return provided for by law no. 227/2015. The deadline for payment and declaration of tax obligations is the 25th of the month following the month in which the payment is made from the unemployment insurance budget;
- No work insurance contribution is due for compensation paid by the State.
Formalities to be completed by the employer
In order to benefit from the allowance granted by the State, the employer must submit via e-mail, to the competent agency in the jurisdiction of the registered headquarter, the following documents:
- A request signed and dated by the legal representative;
- A sworn statement;
- The list of the beneficiaries of the allowance, established by the legal representative, according to the template to be approved by order of the Minister of Labor and Social Protection within 10 working days from the entry into force of the GEO no. 111 / 2021, i.e. 10 days from October 4, 2021.
The documents must be submitted in the month following the month for which payment of the compensation is requested.
Once the file is verified and approved, the allowance will be paid within 15 days of the filing date, into the employer's bank accounts.
The allowance will be paid to the employee within 3 working days of receipt of the amounts by the employer.
Other categories of people benefiting from furlough allowance:
- Professionals whose activity is governed by art. 3 par. (2) of Law No. 287/2009 on the Civil Code, in particular, self-employed persons ;
- Natural persons whose income comes exclusively from copyright and related rights, as regulated by Law No. 8/1996 on Copyright and Related Rights ;
- Persons who have concluded individual employment agreements under Law no. 1/2005 on the organization and functioning of cooperation.