Category B has been extended until the end of August 2020 and the government has approved a new form of support – Category C!
Are you considering how to maintain employment of your employees and minimize economic losses? Take a look at what financial instruments the state has prepared for entrepreneurs whose employees have been affected, directly or indirectly, by government measures taken to combat coronavirus.
Under the Antivirus program, the Ministry of Labour and Social Affairs (MLSA) has prepared several types of compensation for employers, depending on the different situations in which they may find themselves. According to published statistics as at 27 May 2020, during March and April 2020 an amount of CZK 799,165 was paid out in contributions out of a total amount of CZK 7,413,422,411.
Below we set forth answers to the most frequently asked questions in this matter.
Where and how do I apply?
Only by electronic means, via the website application at https://antivirus.mpsv.cz or by using electronic data mailboxes or email with an acknowledged electronic signature.
How should I proceed as an employer?
1. The employer shall first fill in the application for the allowance for compensation of wages, on the basis of which an agreement on the provision of the allowance will be automatically generated between the Labour Office and the employer. Attached to the application for the allowance is a document on the establishment of the employer's account, to which the Labour Office will then send reimbursements of wages paid and, if applicable, a power of attorney for the employer's representative.
2. The employer shall then send the application together with the agreement and attachments via a data box or e-mail with a recognized electronic signature. The agreement thus sent shall be deemed to have been signed by the applicant. Subsequently, it will be checked whether the agreement can be concluded, in other words, whether the agreement is without defects and the employer preliminarily meets the conditions of the Antivirus program. The agreement is concluded if it is electronically signed by the Labour Office and sent back to the employer (data box or e-mail with a recognized electronic signature).
3. After the conclusion of an agreement between the Labour Office and the employer, the employer must submit a monthly statement of paid wage compensations, including mandatory contributions. You will need to do this for each Antivirus Category separately and for each month. Even in this case, the bill is sent via a data box or e-mail with an electronically verified signature.
When will I receive state contributions as an employer?
After sending the statement and checking whether the employees to whom the right to the claim is claimed are the employees of the employer and the contribution can be applied for, the contribution will be provided to the specified account of the employer.
For what period can I apply for a contribution?
Category A: for the period from 12 March 2020 to 31 May 2020; Category B will be applicable for the period from 12 March 2020 to 31 August 2020. The employer is entitled to claim compensation for compensation of wages paid to employees for a maximum of two calendar months immediately preceding the month in which the agreement was concluded. On 25 May 2020, the government approved the extension of Category B until the end of August 2020.
Can I claim for all my employees?
It will always depend on why the employee does not work - that is, the reason for his obstacle at work. Even if the employee is at home for one of the reasons listed below, the allowance can only be claimed for an employee ("employment contract") - the employee must not be on notice as of the date of submission of the payroll statement, he must not be dismissed (does not apply in the case of termination pursuant to section 52 letter g) or h) of the Labour Code) and must participate in sickness and pension insurance. At the same time, it is necessary for the employer to first pay the employee's salary and pay the mandatory contributions. Also, it is not possible to apply for a contribution if the employer has already received another contribution for the employee from the Labour Office. The employer's contribution is not due even if the wage compensation is covered by other public budgets. Compensation cannot also be provided if the employee is also a company executive or a member of the employer's statutory body, if the employment contract was signed by the same natural person on the part of both the employer and the employee.
Is there any other form of support for employers?
Yes, the MLSA has prepared another form of targeted support for employers in order to protect employment, referred to as "Category C"; the relevant law is debated in Parliament. Scheme C consists of a waiver of social security contributions and contributions to the state employment policy paid by the employer for employees in the months of June to August 2020. However, this form of support is to be granted only to smaller employers whose number of employees participating in health insurance, does not exceed 50 on the last day of the calendar month. An employer will also have to maintain 90% employment and 90% of the employees' assessment bases for entitlement to support under Category C compared to March 2020. Entitlement to support under Category C will not arise for employers who already draw a contribution from the Antivirus program in the relevant calendar month to compensate paid wages. The proposal approved by the government will now be discussed by the Chamber of Deputies and the Senate.
How do I need to proceed?
It is advisable to start by compiling an overview of employees and their hours worked by place of operations , specifying on which days employees worked and which days they did not, and for what reason. We also recommend adding the amount of wage compensation provided. For employees who potentially meet the requirements, it is recommended to indicate under which compensation scheme they would fall and calculate the amount of compensation provided by the employer and compare this with the maximum contribution that the state should provide.
How to pay advances for income tax on employment and contributions to insurance?
When paying wage compensation to employees in the above cases, it is important to distinguish what constitutes a limitation in the employer's activity. In the case of an A-category wage reimbursement where the employee has been ordered to quarantine, the employer pays the wage reimbursement to the employee for up to 14 calendar days according to the above information. Then the wage compensation is paid by the Czech Social Security Administration. However, this compensation paid by the employer is specific because it is exempt from income tax on employment and is not subject to insurance contributions.The other remuneration referred to above is paid by the employer to the employee as long as the obstacle to employment persists and is subject to both income tax and dependent contributions. Therefore, mandatory deductions should be considered in these cases. From the employer's point of view, the compensation of wage substitution and possible contributions provided to employers is tax neutral.