Subsidisation of employees’ remuneration by the district governor

According to the COVID-19 Act, entrepreneurs are entitled to two subsidies for employees’ remuneration, which cannot be used simultaneously for the same employee.

The previous subsidy was covered by the article [link]. This article focuses on the other one, which unfortunately has not yet been announced on the pages of the district employment offices.

From my practice to date, concerning the introduction of the anti-crisis package for enterprises, it follows that in order to make good use of the subsidies for employees, one should analyse one’s economic situation and make a decision which subsidy will be more beneficial for the entrepreneur in relation to a given employee and whether it is profitable at all.

As far as the subsidy from a district governor is concerned, below I present a short guide to the rules of granting it.

Who is entitled?

The entrepreneur who is[*]: 

a) a micro entrepreneur;

b) a small entrepreneur;

c) a medium entrepreneur;

1) in the event of a decrease in economic turnover following the occurrence of COVID-19 by at least 30%, understood as a decrease:

• in terms of quantity or value, calculated as a ratio of the total turnover during any 2 consecutive calendar months, falling in the period after 1 January 2020 to the day preceding the date of submission of the application for a subsidy, compared to the total turnover during the same 2 consecutive calendar months of the previous year;

• thirty consecutive calendar days are also considered as a month, if the two-month comparative period starts during a calendar month, i.e. on a day other than the first day of the given calendar month.

2) in respect of which there are no grounds for declaring bankruptcy;

3) who is not in arrears in the payment of tax liabilities, social security contributions, health insurance, Guaranteed Employee Benefits Fund, Labour Fund or Solidarity Fund until the end of the third quarter of 2019;

4) if the same costs have not been or will not be financed from other public funds, e.g. from the funding for job protection obtained from the director of the provincial employment office.

What will be subsidised?

1) Remuneration:

a) for employees (employment contract);

b) for persons employed on the basis of a contract of employment for a home-based work, or a contract of mandate or any other contract for the provision of services to which the provisions relating to the assignment apply, except for domestic help employed by a natural person.

2) Contributions from subsidised remuneration for social security.

What is the amount of the subsidy?

It depends on the amount of the decrease in turnover.

In case of a decrease in turnover by:

1) at least 30% – the subsidy may be granted in an amount not exceeding the sum of 50% of the remuneration of individual employees covered by the application for a subsidy together with the social security contributions due from these remuneration, but not more than 50% of the amount of the minimum remuneration for work within the meaning of the Act of 10 October 2002 on the Minimum Remuneration for Work, hereinafter referred to as the “minimum remuneration,” increased by social security contributions from the employer with respect to each employee – i.e. PLN 1,300 and social security contributions on PLN 1,300;

2) at least 50% – the subsidy may be granted in an amount not exceeding the sum of 70% of the remuneration of individual employees covered by the application for a subsidy together with the social security contributions due from these remuneration, but not more than 70% of the amount of the minimum remuneration, increased by social security contributions from the employer with respect to each employee – i.e. PLN 1,820 and social security contributions on PLN 1,820;

3) at least 80% – the subsidy may be granted in an amount not exceeding the sum of 90% of the remuneration of individual employees covered by the application for a subsidy together with the social security contributions due from these remuneration, but not more than 90% of the amount of the minimum remuneration, increased by social security contributions from the employer with respect to each employee – i.e. PLN 2,340 and social security contributions on PLN 2,340.

For what period?

Not more than 3 months.

How is the subsidy paid out?

Monthly.  

What conditions must an entrepreneur meet?

The entrepreneur is obliged to maintain the employment of the employees covered by the agreement for the period of the subsidy and, after the end of the subsidy, for a period equal to that period.

What happens if I am not able to continue to employ the employee in the following months?

The entrepreneur shall return the subsidy without interest, proportionately to the period of non-employment of the employee, within 30 days as of the date of delivery of the call of the district governor.

What should I do to get the subsidy?

Submit an application for a subsidy to the district employment office having jurisdiction over the seat or place of work of employees within 14 days as of the date of announcement of enrolment call by the governor of the district employment office.

Note:

I hope that the aforementioned subsidy will be made available to entrepreneurs as the COVID Act uses the wording “a district governor may grant a subsidy,” which worries me as an attorney-at-law. However, assuming the rationality of the legislator, let’s assume that the subsidy will appear within a few days on the websites of employment offices.

I am at your disposal for any questions that you may have.

Beata Bieniek-Wiera, attorney-at-law

[*]

1) A micro entrepreneur – an entrepreneur who in at least one of the last two financial years met the following cumulative conditions:

a) had on average less than 10 employees per year; and

b) achieved annual net turnover from sales of goods, products and services and financial operations not exceeding the PLN equivalent of EUR 2 million, or the total assets of its balance sheet as at the end of one of those years did not exceed the PLN equivalent of EUR 2 million.

2) A small entrepreneur – an entrepreneur who in at least one of the last two financial years met the following cumulative conditions:

a) had on average less than 50 employees per year; and

b) achieved annual net turnover from sales of goods, products and services and financial operations not exceeding the PLN equivalent of EUR 10 million, or the total assets of its balance sheet as at the end of one of those years did not exceed the PLN equivalent of EUR 10 million;

– and who is not a micro entrepreneur.

3) A medium entrepreneur – an entrepreneur who in at least one of the last two financial years met the following cumulative conditions:

a) had on average less than 250 employees per year; and

b) achieved annual net turnover from sales of goods, products and services and financial operations not exceeding the PLN equivalent of EUR 50 million, or the total assets of its balance sheet as at the end of one of those years did not exceed the PLN equivalent of EUR 43 million;

– and who is not a micro- or small entrepreneur.