EMCC European Monitoring Centre on Change

Remaining in employment - co-financing employment with another employer

Croatia
Phase: Management
Típus:
  • Employment incentive
  • Support of SMEs
Utoljára módosítva: 27 August, 2020
Név:

Ostanak u zaposlenosti – sufinanciranje zapošljavanja kod drugog poslodavca

Angol név:

Remaining in employment - co-financing employment with another employer

Coverage/Eligibility

This measure is designed for individuals from vulnerable demographic groups who have been made redundant and are going to start to work with another employer. The subsidy is approved for a maximum of 12 months to all employees over the age of 50, people with disability and members of specific groups of the society who were made redundant due to business restructuring and now work for another employer, regardless of the size of their new employer's company. However, the maximum amount of the annual subsidy is limited according to the size of the new employer's company and the employees' level of formal education.

Main characteristics

The subsidy is approved for a period of up to one year for workers who had been made redundant due to economic difficulties, and who now work for a new employer. The available public funds range from 50–75% of an employee's gross annual salary. The highest subsidy is allocated to people with disability and the amount of the subsidy is the same regardless of the size of the employer for whom they now work. For those who have completed primary school, the subsidy is up to HRK 32,910 (€4,375) per year. For those with a high school diploma, it is up to HRK 42,000 (€5,583). For people with disability with a university degree, the subsidy is up to HRK 52,500 (€6,979) per year. The mentioned amounts have not been changed henceforth.  

Unlike subsidies approved for people with disability, the subsidies for workers older than 50 depends on the level of education of the worker in question and the size of the company by which they are employed. Subsidies for employees aged 50 and older with a primary school diploma and who have had permanent work contracts for at least 12 months and are at risk of redundancy are up to HRK 13,164 (€1,750) in a large company and HRK 21,940 (€2,916) in SMEs. For employees aged 50 and over with a high school diploma, the subsidy ranges from up to HRK 16,800 (€2,233) in a large company to up to HRK 28,000 (€3,722) per year in an SME. The subsidy for employees aged 50 with a university degree is equal for those employed in an SME and a large company – up to HRK 21,000 (€2,792). The mentioned amounts have not been changed henceforth.  Due to low interest, this measure has not been incorporated in the measures of the active employment policy for 2020. 

Funding

  • National funds
  • Employer

Involved actors

National government
Funding.
Public employment services
Responsible for the decision as to whether or not the employer is eligible for public funding support. The public employment service also intermediates between workers who are to be made redundant and the new employer.

Effectiveness

There are no separate data for the number of users of this kind of subsidy, but according to the data for all forms of subsidies, the number of users has been relatively small (only few hundred users per year – annual report by the Croatian Employment Service, various years). There has been almost no interest due to the small amount of the subsidy, employers have not been able to understand and apply the measure and there was also almost complete lack of promotion for the measure. According to the evaluation, participants in subsidy programmes were less likely to be in unemployment than controls for the first two years after subsidies ceased, but the advantage of participants was declining over time. Such subsidies in Croatia have been almost always aimed at increasing (or at least protecting) total employment, but not the skills and employability of the participants, which hinders their efficiency and the long-term impact on the participants.

CES and Ipsos Puls (2016) propose the need to stabilise the design and the conditions of the majority of measures, particular for subsidies, in the long-term or at least medium-term. Furthermore, it is important not to change the contents and the criteria of measures (for example, supplementing documentation) during one cycle of implementation; and prepare the instructions on time. Finally, there is a need to constantly and comprehensively synchronise and simplify the regulations and implementation, which has not always been the case until now. Low interest for this measure will probably lead to its cancellation shortly.

This measure has not been mentioned in the Yearly  Report by the Croatian Employment Service for 2017, 2018 and 2019. 

Strengths

This measure helps two particularly vulnerable groups in the Croatian labour marketolder workers and employees with disability. If an elderly person or a person with disability becomes unemployed, the likelihood of her re-employment is very low. The goal of the measure is to make these employees more attractive to prospective employers.

Weaknesses

The public employment service has an exclusive right to decide on subsidy approval and the amount of the subsidy to be approved in each particular case. The measure is applied regardless of the financial strength of the employer. Employers are not obliged to retain employees following the one year period during which they receive a subsidy for employees' salaries. 

Példák

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