In the context of the SARS-CoV-2 coronavirus pandemic, through O.U.G. no. 30/2020, published in the Official Gazette no. 231 of March 21, 2020, the Government has taken some economic measures destined to remove, at least partially, the negative effects felt in the economic plan after the health crisis has intensified and the establishment of the state of emergency by the Decree of the President of Romania no. 195 of March 16, 2020. In the following, the Costaș, Negru & Asociaţii team makes some preliminary considerations about the support measures to be applied.
Support measures in the case of technical unemployment
In the conditions in which by the Decree of the President of Romania no. 195 of March 16, 2020 in Romania was established the state of emergency, and by military ordinance no. 1 of March 17, 2020 (published in the Official Gazette no. 219 of March 18, 2020) extreme measures have been taken to limit some commercial activities, there are economic sectors significantly affected and probably, in some cases, irreparable. Specifically, according to art. 1 paragraph (1) the mentioned military ordinance suspends the activity of serving and consuming food and alcoholic and non-alcoholic beverages, organized by restaurants, hotels, cafes or other public places, in the spaces destined for this purpose inside or outside the location; according to art. 2 of the same normative act suspends all cultural, scientific, artistic, religious, sports, entertainment or gambling, spa treatment and personal care activities, carried out in confined spaces; according to art. 3 paragraph (1) it is forbidden to organize and conduct any event that involves the participation of more than 100 persons in enclosed spaces; according to art. 7, the suspension of some air flights performed by the economic operators is suspended or prolonged.
Specifically, the measures shown have affected the economic operators both directly and indirectly (in the case, for example, of support activities for the industries in which the activity stopped).
Therefore, employers in situations of this type or in other situations in which the health crisis and the emergency situation have blocked or significantly reduced their activity were forced to resort to extreme measures. Those who had the possibility, granted to the employees rest leave or special leave for the supervision of children became possible as a result of the appearance of Law no. 19/2020 (with separate comments below). For the most part, however, employers have opted to activate the option opened by art. 50 lit. f) of the Labor Code and found the suspension of law of the individual employment contracts, as a result of the occurrence of a case of force majeure.
Temporary suspension of the employment contract
In accordance with Art. 52 paragraph (1) lit. c) from the Labor Code, the individual employment contract may be suspended at the initiative of the employer in case of temporary interruption or reduction of the activity, without ceasing employment relationships, for economic, technological, structural or similar reasons. Under these conditions, according to art. 53 paragraph (1) of the Labor Code, the employer owes the employee an allowance that cannot be less than 75% of the basic salary. This allowance can be reduced, under the conditions of art. 52 paragraph (3) of the Labor Code, respectively in case the temporary interruption or reduction of the activity lasts more than 30 days (in which case the work schedule is reduced from 5 days to 4 days per week).
Temporary suspension of the employment contract in the context of the health crisis
In the context described, in the content of art. XI of the O.U.G. no. 30/2020 The Government has regulated a special regime for some of the work contracts suspended or that will be suspended under art. 52 paragraph (1) lit. c) of the Labor Code. It is important to specify in this context that:
– The support measures provided by the Government will only be granted in cases where the employment contract is temporarily suspended pursuant to art. 52 paragraph (1) lit. c) of the Labor Code. Therefore, for example, if the individual employment contract was suspended by law according to art. 50 lit. f) from the Labor Code, it is necessary to operate in REVISAL the modification of the legal basis and practically the suspension of the individual employment contract on the initiative of the employer.
– The support measures are applied only for the economic operators who fulfill the conditions provided by art. XI paragraph (2) of the O.U.G. no. 30/2020 or for the persons provided for in art. XV of the O.U.G. no. 30/2020.
Conditions to benefit from support measures
According to art. XI paragraph (2) of the O.U.G. no. 30/2020, the support measures benefit the employees of the employers who are in one of the following cases:
a) discontinue the activity in whole or in part based on the decisions issued by the competent public authorities according to the law, during the period of emergency state decreed and hold the certificate of emergency situations issued by the Ministry of Economy, Energy and Business Environment;
b) reduce the activity as a result of the effects of the COVID-19 epidemic and do not have the financial capacity to pay all the salaries of their employees; In this situation, employers must declare, on their own responsibility, that they have registered a decrease of the receipts by at least 25% compared to the average of the incomes from January to February 2020 and that they do not have the financial capacity to pay all the employees.
In a preliminary analysis, some interesting aspects should be noted:
– In the case provided for in art. XI paragraph (2) lit. a), it will be compulsory to obtain the emergency certificate only from a single source, from the Ministry of Economy, Energy and Business Environment. Conversely, similar certificates issued or that could be issued by the county Chambers of Commerce, Industry and Agriculture will not be considered. It is foreseeable, from our point of view, that obtaining the certificate of emergency situations, from a single source, for all the affected economic operators, will raise serious problems and will extend over time.
– In the case provided for in art. XI paragraph (2) lit. b), the conditions for granting the support measures are at least questionable. Thus, the existence or non-existence of the financial capacity to pay all salaries should be irrelevant, if the Government wants the measure not to be discriminatory. At the moment, given that all economic operators are affected by the same problem, it is clearly discriminatory to be considered eligible economic operators who do not have the financial capacity to pay all their employees, while the employers who have additional reserves are excluded from this benefit (without any possibility to subsequently settle with the State the amounts paid during the economic crisis period). It should be noted that in this case, it is not necessary to obtain the emergency certificate.
– Also, regarding the case provided in art. XI paragraph (2) lit. b) from O.U.G. no. 30/2020, there is an artificial distinction that can again lead to problems of interpretation. Thus, in order to become eligible, an economic operator must prove that its revenue was reduced in March 2020 by at least 25% compared to the average of January – February 2020. However, there are economic operators in the market that have not had any activity in January and February, which cannot carry out activity in March due to state of emergency and which lacks the element of comparison. To the extent that no case-by-case assessment is made, this condition will also be discriminatory.
Amount of support measures
According to art. XI paragraph (1) of the O.U.G. no. 30/2020, the Government is prepared to bear, from the unemployment insurance budget, allowances of 75% of the basic salary corresponding to the job occupied, with a cap on the level of 75% of the average gross wage for 2020 (5,497 lei) . This allowance will be granted to all employees of the employers who are in the hypothesis described by art. XI paragraph (2) lit. a) from O.U.G. no. 30/2020. In contrast, for employers who are in the situation described by art. XI paragraph (2) lit. b) from O.U.G. no. 30/2020, the support measures are limited, they will be granted only for the maximum 75% of the employees who have individual labor contracts active at the date of entry into force of the emergency ordinance no. 30/2020.
In fact, we believe, the sphere of employers from art. XI paragraph (2) lit. b) from O.U.G. no. 30/2020 could be significantly reduced depending on a small technical element. If the employers, until March 21, 2020, proceeded to the legal suspension of the individual employment contracts according to art. 50 lit. f) from the Labor Code, an interpretation of the Government is foreseeable in the sense that they are not eligible for support measures regarding the individual contracts of work suspended by law.
In a first draft of the emergency ordinance, the Government envisaged the conditionality of granting support measures for maintaining individual employment contracts for a period of 6 months, starting from the date of termination of the emergency situation. This measure was renounced, it no longer appears in the form O.U.G. no. 30/2020 which was published in the Official Gazette.
The tax regime of the allowance
As provided in art. XI paragraph (4) of the O.U.G. no. 30/2020, the compensation determined according to art. XI paragraph (1) is subject to income tax and compulsory social contributions. In other words, using a simple example, if the unemployment insurance budget pays a gross compensation of 3,000 lei to an eligible employee, his employer will deduct the social insurance contribution of 25% and the health insurance contribution of 10% of the gross compensation and the budget goes. The calculation of the income tax is done by the algorithm simplified by art. 78 paragraph (2) lit. b) Fiscal code, that is the algorithm for income from wages obtained outside the basic function. According to art. XI paragraph (8) of the O.U.G. no. 30/2020, a special facility is granted for employers in difficulty, who are exempted from paying the insurance contribution for work (2.25%).
The procedure for accessing the allowance granted as a support measure
Articles XII and XIII of the O.U.G. no. 30/2020 regulates the procedure for accessing the allowance. Thus, the employer who fulfills the conditions provided by art. XI paragraph (2) will request the agencies for county employment to pay the allowances, for the eligible employees. Applications can be submitted in the current month for payment of the previous month’s allowance (for example, starting April 1, 2020 to March 2020). Payment from the unemployment insurance budget is made no later than 30 days from the submission of documents. Therefore, admitting that an employer will be able to submit the application with full documentation on April 1, 2020, the allowances will be paid to the distressed employer at the beginning of May 2020 at the earliest. its employees’ compensation, after calculating and withholding compulsory social contributions and income tax (quite interestingly, GEO no. 30/2020 does not provide a deadline for payment of the benefits received from the unemployment insurance budget, but only the deadline for calculating and transferring the compulsory social contributions and the income tax, which is the 25th of the month following the one in which the payment is made from the unemployment insurance budget).
Special support measures for professionals and athletes
In accordance with Art. XV of the O.U.G. no. 30/2020, the professionals regulated by the Civil Code and who do not have the quality of employers and interrupt the activity totally or partially based on the decisions issued by the competent public authorities, during the state of emergency, also benefit from support measures. It will be interesting to see how the sphere of these people is determined, given that they seem to partially collide with the provisions of art. X paragraph (5) – (6) of the O.U.G. no. 29/2020, which requires legal professionals (notaries, lawyers and judicial executors) to continue to provide the public interest service of justice, under the sanction of exclusion from the profession.
The same thing happens with the persons mentioned in art. 671 para. (1) lit. a) – c) of the Law of physical education and sport no. 69/2000 (athletes, coaches, doctors, nurses, masseuses, physiotherapists, researchers).
The support measures provided by the Government are the following:
– For the professionals mentioned in art. XV paragraph (1) of the O.U.G. no. 30/2020, an indemnity equal to the minimum gross basic wage in the country guaranteed for payment established for the year 2020 (2,230 lei or 2,350 lei for those with higher education) is granted from indeterminate sources (since the consolidated general budget is a legal fiction). .
– For the participants in the sporting activity mentioned in art. XV paragraph (1) of the O.U.G. no. 30/2020, an indemnity of 75% of the cash rights related to the payment of the sports activity (as provided for in the sports activity contract) is granted from the same sources, but not more than 75% of the gross average wage ( 5,497 lei).
According to art. XV paragraph (3), both allowances are subject to taxation and payment of compulsory social contributions, according to the general provisions of the Fiscal Code.
Support measures during the blockade of the educational system
As a result of the changes made by the O.U.G. no. 30/2020, starting with March 21, 2020, Law no. 19/2020 (the normative act that regulated the first support measures for families affected by the suspension of courses) becomes applicable only in case of suspension of courses or temporary closure of the educational units where the children of the data subjects are enrolled, due to adverse weather conditions. or other extreme situations so decreed by the competent authorities with responsibilities in the field. The paid days off are granted only during the period when the competent authorities decide to close the respective educational units.
Beneficiaries of support measures
In the updated form of Law no. 19/2020, parents who meet cumulatively meet the following conditions benefit from paid days off: have children up to 12 years old, enrolled in a school or have children with disabilities up to 18 years old, enrolled in a school educational establishments; the busy workplace does not allow work from home or telemarketing. By “parent”, within the meaning of Law no. 19/2020 amended, we will understand: the natural parent, according to Law no. 287/2009 regarding the Civil Code, republished, with the subsequent modifications and completions; adopter; the person who has the child / children in foster care for adoption; the person who has the child or guardianship; the person designated according to art. 104 paragraph (2) of Law no. 272/2004 regarding the protection and promotion of the rights of the child, republished, with the subsequent modifications and completions; the parent or legal representative of the adult person with a disability enrolled in a school.
By art. I point 3 of the Emergency Ordinance no. 30/2020 cases of exclusion from the benefits of Law no. 19/2020, by inserting in the art. 1 of the Law of two new alignments – par. (33) and para. (34), with effect from the time of publication and entry into force of the O.U.G. no. 30/2020, respectively March 21, 2020. Thus, Law no. 19/2020 does not apply in the following cases:
– the parent is in the leave provided in art. 2 paragraph (1) or art. 11 paragraph (2) or art. 31 paragraph (1) of the Government Emergency Ordinance no. 111/2010 regarding the leave and the monthly allowance for the raising of children;
– the parent is the personal assistant of one of the dependent children;
– the parent is on vacation / free leave;
– one of the parents is in technical unemployment – the situation in which his employment relationship is suspended for the temporary interruption of the activity of the employer, under the conditions of art. 52 paragraph (1) lit. c) of the Labor Code;
– the other parent does not earn income from salaries and assimilated to salaries, income from independent activities, income from intellectual property rights, income from agricultural activities, forestry and fish farming, subject to income tax (here we specify that we may be in the presence of a drafting error, the exclusion hypothesis being unclear).
The amendments made on March 21, 2020 raise questions regarding the scope of application of Law no. 19/2020 prior to the adoption of the O.U.G. no. 30/2020. We ask ourselves, these persons were implicitly excluded from the benefit of paid free days and previously, due to the way of drafting art. 2 paragraph (2) of the Law?
The initial form of the so-called text imposed the following condition for granting paid days off: the existence of a declaration on the other parent’s own responsibility, stating that he did not request at his place of work free days that would suit him according to this law. Thus, if the other parent did not have a job, respectively he was on child-raising leave, he was the personal assistant of one of the children, he was in technical unemployment, it is obvious that he could not provide such a declaration, missing the job itself – the aspect that would entitle him to obtain free days – which is why the condition provided by art. 2 paragraph (2) of Law no. 19/2020 is not fulfilled, a fact that still leads to the inapplicability of these benefits and prior to the clarifying intervention of the legislator.
The related allowance is 75% of the basic salary corresponding to a working day, but no more than the daily correspondent of 75% of the national gross average wage, which in 2020 amounts to 5,429 lei per month.
Thus, the allowance will have a maximum monthly amount of 4,072 lei.
The indemnity is subject to taxation and payment of social insurance contributions under the conditions of the Fiscal Code.
The free days are granted at the request of one of the parents, submitted to the employer of the person who will supervise the child during the period when the educational units are temporarily closed.
The request will be accompanied by a declaration on the other parent’s own responsibility, stating that he has not requested at his place of work free days that would suit him according to the present law and is not in one of the situations of exclusion. , as well as a copy of the birth certificate (s) of the child (ren). The model of the declaration was published as an annex to the Government Decision no. 217/2020 and is available online.
Who pays the indemnity?
The allowance will be paid to the parent by the employer, according to art. 3 paragraph (1) of Law no. 19/2020.
Employers can only claim the settlement of the amounts representing the net allowance, actually received by the parent. These amounts will be settled from the Guarantee Fund for the payment of salary claims. Thus, taxes and social security contributions remain the responsibility of the employer with a definitive title.
The settlement procedure was established by H.G. no. 217/2020, also published in the Official Gazette on 21.03.2020. Thus, in order to settle the amounts, the employer will send a request to the County Agency for Employment in the territorial area in which it / the branch / work place is doing its activity.
The request is sent via e-mail within a maximum of 30 days from the date on which the employer paid the contributions and taxes related to the allowance. Thus, we must keep in mind that the declaration and payment of tax on wages, respectively of social contributions can be made only in the month following the one for which the income was realized, maximum up to 25, according to art. 82 and respectively art. 146 Tax Code. Thus, there will be a delay of even one month from the moment of the payment of the allowance and until the moment when the employer will be entitled to make the settlement request.
Within 24 hours of receiving the e-mail the Agency will communicate the registration number of the request.
The settlement will be made within 60 calendar days from the date of receipt of the request, respectively of the documents annexed to it. Finally, from the moment of the actual payment of the allowance until the time of its settlement, it will be possible to spend an interval of even 120 days, during which the employer has the obligation to find resources for payment of the allowance in the indicated amount.
Therefore, in reality, we can only speak of a clearly timed aid, which will allow the employer to recover, in time, the allowance paid to the persons who benefit from free days during the health crisis (or, more correctly, during the period when the institutions of education will remain closed).
This material was prepared, for the web page of the civil society of lawyers Costa, Negru & Asociaţii, by av. dr. Cosmin Flavius Costaș (Arad Bar Association) and av. Alexandra Tomuța (Arad Bar Association).