Education for stability

Czechia
Phase: Management
Тип:
  • Response to COVID-19
  • Income support for workers
  • Working time flexibility
Last modified: 03 August, 2021
Име (на собств. език):

Příspěvek v době částečné nezaměstnanosti - Kurzarbeit

Име на английски:

Contribution at the time of partial unemployment - Kurzarbeit

Coverage/Eligibility

The contribution is designed for employers (regardless of company size or sector but with the exception of state-funded organisations) who face reduction of their production due to negative economic developments or are affected by natural disasters, and as a result they would need to reduce the number of employees. The company must demonstrate that the employer is unable to provide work for more than 20% of the weekly working time. The contribution is provided on the basis of an agreement concluded with the labor office. The contribution is provided for a period of so-called obstacles to work on the part of the employer pursuant to Act 262/2006 Coll., of the Labour Code, for a maximum period of 6 months. The beginning and end of the period in which the allowance can be applied for, the reasons for which the allowance can be granted and some other conditions are set by the government by regulation. At the time of writing, such a regulation is a temporary Antivirus program. In September 2020, the Czech government is discussing the approval of a draft amendment to the Employment Act. The aim of the bill is to enshrine support in the law during partial employment. The proposed legislation on support takes over the parameters and procedures of the Antivirus program and adds some other conditions for its provision.

Main characteristics

The amendment to the act no. 435/2004 Coll. on employment, in force since 1 October 2015, aims to help employers to retain existing employees in the event of adverse economic developments or production affected by natural disasters. This measure builds on the original programme 'Education for Stability', which run in the period 2012-2014 and was funded from the EU Human Resources and Employment Operational Programme (under the European Social Fund).

Section 115 of the employment act establishes that, if the company is unable to provide work to their employees for more than 20% of the weekly working time, it should give employees a wage compensation amounting to at least 70% of their original salary according to the work contract. Up to 20% of the employee's wage is paid by the labour office (but not exceeding 12.5% of the average wage in the national economy for the first to third quarters of the previous calendar year) and the remaining 50% by the employer. The above-mentioned wage compensation is determined by agreement with the trade union or by internal regulation and can be provided for a maximum period of six months. This measure is activated by the government when the national economy is affected by a recession or natural disasters. The time period and conditions under which it is possible to apply for the contribution are set by the government.

Response to COVID-19

In the framework of the 'Antivirus employment retention programme' (Antivirus - podpora zaměstnanosti) the government compensates employers' wage costs from 12 March to 31 August 2020; this period has been extended on 24 August  by the government of Czechia to the end of October 2020:

  • In case of ordered quaratine, the employee receives a wage compensation amounting to 60% of the average earnings (the first 14 days paid by the employer) from the employer. Average earnings are determined from the gross salary (or salary) settled for payment by the employee in the relevant period and from the time worked in the relevant period. The relevant period is the calendar quarter preceding the calendar quarter in which the average earnings are determined to satisfy the employee's claims. The employer receives a state compensation of 80% of the paid wage compensation and the social insurance contributions (up to CZK 39,000 (€ 1,415) per month and employee).
  • In case of business closure ordered by the government, the employee receives a wage compensation of 100% of the average earnings from the employer. The employer receives a state compensation of 80% of the paid wage compensation and the social insurance contributions (up to CZK 39,000 (€ 1,415) per month and employee).
  • In case of obstacles to work on the part of the employer due to economic difficulties caused by the COVID-19 crisis, the employee receives a wage compensation of 60-100% of the average earnings from the employer. The employer receives a state compensation of 60% of the paid wage compensation and the social insurance contributions (up to CZK 29,000 (€ 1,052) per month per employee).

Funding

  • National funds
  • Employer

Involved actors

National government
Legal framework; funding
Public employment services
Labour office
Employer or employee organisations
Trade unions at the company level

Effectiveness

According to MSV data as of 7 September 2020, every fifth company was supported under the Antivirus program on the basis of an agreement concluded with the Labor Office, which, according to the Czech Social Security Administration, pays insurance premiums for its employees. In total, 57,582 companies and 788,287 employees were supported. Most companies have repeatedly applied for a contribution to pay their employees' wages. The amount of support reached CZK 17.8 billion (€672 million).

In the period from September 2012 to December 2014, the programme 'Education for Stability' supported 1,144 employees from enterprises in difficult economic situation. Since the end of the programme, no further information has been made available. No such contributions have been provided since the last recession. The scheme is activated when a recession in the national economy is officially declared.

Strengths

A strength of this measure is that it gives the possibility to employers to retain existing employees in the event of production affected by adverse economic developments or natural disasters.

Weaknesses

The measure (whereby the employer pays 50% of the salary and the labour office contributes for an additional 20%) is complicated for employers in terms of administration, which may have a demotivating effect. A more expensive but considerably less complicated option is to resort to an alternative measure in case of adverse economic developments or natural disaster. This is called  'obstacles to work on the employer side' (section 209 of the labour code) or  'partial unemployment' (section 207 of the labour code called 'idle time and work interruptions due to adverse climatic conditions'), allowing the employer to pay the employee at least 60% of the salary without the involvement of the labour office.

Examples

No information available.
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