State Aid with Quarantine already Mitigating: Everything you Need to Know about Subsidies


2020 05 20

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The State pays subsidies to companies that have announced downtime for employees during quarantine to cover part of their salaries, which during the downtime cannot be less than the minimum monthly salary for all normal working hours. With quarantine mitigating and employees returning to work, the State support for employers and employees will not stop and will be available for another 6 months.

“These subsidies are most relevant to the employers who have frozen their activities during quarantine but are gradually returning to work. Even with the easing of quarantine requirements, the situation will not be easy for some time, and production, services and other areas of the economy will recover only gradually. The State aid aims to help employers get through this period of instability and keep employees in the labour market” – states Linas Kukuraitis, the Minister of Social Security and Labour.

Which Employers are Eligible for Subsidies with the Quarantine Mitigating?

Subsidies to pay the salaries of employees when many activities are getting back on track are available to employers who fall into at least one of the three categories.

ANNOUNCED DOWNTIME. Subsidies for the salaries of employees who have come back from downtime can be paid to employers who have not dismissed employees during the quarantine itself, but announced downtime for them and applied for the State aid. Subsidies after downtime will be paid only for employees who have had or have been announced downtime and have been paid subsidies during quarantine.

May be paid upon cancellation of downtime during or after quarantine.

EMPLOY THE SUPPORTED UNEMPLOYED. Subsidies may be paid to employers who employ the supported unemployed persons sent by the Employment Service: for example, persons with disabilities, elderly or young people, long-term unemployed and etc. Subsidies are paid for the newly employed persons sent by the Employment Service after quarantine.

May be paid from the date of entry into force of the law (the 15th of May) and after quarantine.

HAVE BEEN AFFECTED BY COVID-19. Subsidies will also be available to employers who are included in the list of companies affected by COVID-19 compiled by the State Tax Inspectorate (STI). Subsidies to these employers will be paid for a maximum of 10 employees if the company employs up to 20 people or for a maximum of 50 percent of employees if the company employs more than 21 people.

May be paid from the date of entry into force of the law (the 15th of May) and after quarantine.

To receive subsidies after quarantine, an employer will have to meet at least one of the conditions.

Subsidy Amounts

The amounts of the subsidies paid for employees returning from downtime and working in companies affected by COVID-19 or employed after being sent by the Employment Service in the first-second month can be as high as 100% of the salary calculated for the employee, in the third-fourth month – 50%, in the fifth-sixth month – 30%, but not more than 607 euros gross.

The subsidy ceiling may be higher for companies which will be included in the list of activities focused on the advanced technologies, knowledge-intensive services, achieving the Green Deal objectives and social dialogue, approved by the Ministers of Social Security and Labour and the Economy and Innovation. THE LIST IS AVAILABLE HERE.  

The maximum limit of subsidy for those companies may reach up to 1214 euros gross; however, the amount of the subsidy in the first-second month would be 70%, in the third-fourth month – 50%, in the fifth-sixth month – 30%. However, a 100% subsidy with a maximum limit of 607 euros can be chosen instead in the first two months too.

In case the company is not in a hurry to hire employees for a long term and tends to conclude fixed-term or seasonal employment contracts, the subsidy will be paid for only four months and not more than EUR 303.5 gross.


Which Employers are not Eligible for Subsidies?

The following employers are not eligible for state-subsidised employment:

  • Budgetary institutions.
  • Employers under bankruptcy or liquidation.
  • Legal entities the manager or other responsible person of which has been fined under the Law on Employment for illegal work, violations of the employment procedure of aliens or undeclared work or has had an administrative penalty for illegal work under the Code of Administrative Offenses during the last year prior to the application.

Eligibility for subsidies also disappears if the head of an employer or other responsible person has received more than one administrative penalty in the last year for violations of labour laws, occupational safety and health regulations, concealment of accidents at work, violations of the established notification and investigation procedures, salary calculation and payment procedure, accounting of working time, working conditions of temporary employees and the procedure of commercial or economic activity.

Obligations of an Employer

Employers receiving subsidies for employees are obliged to retain at least 50% of the employees for whom this State support has been received for at least 3 months after the end of the subsidy.

If the obligation is not complied with – that is, if at least half of the employees for which subsidies have been paid will not be retained for 3 months – such employer will not be able to participate in supported employment, job creation, adaptation subsidy and local employment initiative projects for 12 months.

When assessing the retention of employees, those who are dismissed during the probationary period, at the initiative of an employee without good reason or for important reasons as well as when the fault of an employee has been established shall not be included.

What are the benefits for employees?

  • There is an increased likelihood that an employer will not dismiss an employee who has been announced downtime during quarantine.
  • The employment opportunities of the additionally supported unemployed sent by the Employment Service increase.
  • The companies most affected by COVID-19 will not be inclined to lay off employees because they will receive support.