How to deal with a reduction of business during COVID-19 pandemic? Can I impose a reduction of working time to my employees?
One possible way to deal with reduction of business is to adjust working time schedule of the employees. If there are employees’ representatives operating at the employer, the employer can agree with them in a collective agreement or another written agreement on an uneven working time scheduling in form of a “working time account”. This enables the employer to adapt the working time schedule to the current demand on work. In general, the agreed (standard) weekly working time could be balanced during 30 months. This option is, however not available to employers where there are no employees’ representatives (trade unions, work council, employees’ confidant).
In case of downtiming, in general, the employer must pay to the employees who are not working (and stay at home), due to the closure or limitation of the employer’s activities, 100% of the employee’s average earnings. If there are employees’ representatives (trade unions, work council, or employees’ confidant) operating at the employer, the employer can agree with them on 60% compensation. If there are no employees’ representatives at the employer, the employer generally cannot unilaterally decide on the reduced compensation to the employees.
However, special rules were implemented due to the COVID-19 pandemic, which state that during an emergency situation, state of emergency and state of distress (“Emergency Situations”), if the employee cannot perform work (at all, or partially) due to the closure or limitation of the employer’s activities due to a decision of the respective authority or due to the Emergency Situations, the employees who are not working are by virtue of law entitled only to 80% of the employee’s average earnings.
In any case, the employees must receive the compensation at least in the amount corresponding to the statutory minimum wage.
Further, employers affected by reduction of business during COVID-19 pandemic are entitled to ask for allowance to maintain job positions during the Emergency Situations.
Employers that closed or limited their operations during the Emergency Situations based on the respective decision of the Public Health Authority are entitled to an allowance in the amount of 80% of the employee’s average earnings for each employee, up to a maximum cap of EUR 1,100 per employee. In case the employer paid a wage compensation of 60% of the employee’s average earnings, the maximum amount of the allowance is EUR 880.
Employers whose operations were not affected by the decision of the Public Health Authority, but they maintain job positions despite the fact that their sales decreased during the Emergency Situations, are entitled to ask either for payment of a part of employee’s wage compensation up to the amount of 80% of the employee’s average earnings for each employee, up to a maximum cap of EUR 880, or for a flat contribution to compensate part of the labor cost for each employee, with the amount of the contribution based on loss of earnings.
The total allowance that an applicant may receive via this government program is EUR 800,000.