Decisions taken regarding subsidies for employers and self-employed persons (main steps)

Date

2020 04 10

Rating
1
Subsidies for employers and benefits for self-employed persons.jpg

Employers will be able to get 90 percent or 70 percent level state subsidies when downtime must be imposed during the extreme situation and quarantine. During this difficult period, self-employed persons will be granted a benefit of EUR 257 per month.

According to the Minister of Social Security and Labour Linas Kukuraitis, to maintain working places, a total amount of EUR 379 million has been currently provided for, whereas for fixed-rate benefits for self-employed persons having  no income from employment income – about EUR 108 million.

“The situation is extreme and the measures are extreme  – we have to help business, non-governmental or other organisations maintain employees during the quarantine, and ensure certain security for employees themselves. The quarantine will be over and we want people to maintain their jobs, whereas employers - their employees. This way it will be easier to get back to ordinary life. Self-employed persons have also sustained losses that we seek to mitigate by applying a fixed-rate benefit. It will be paid to all self-employed persons irrespective of the form of their activity, provided they do not have employment relationships. This allowance shall not affect the receipt of other social insurance benefits, if they are due”, stated Mr. Kukuraitis.

Subsidies: 90 percent or 70 percent

After the Government announced an extreme situation and the quarantine, when an employer may not provide employees with the job agreed upon in an employment agreement, it has the right to announce downtime or partial downtime. During downtime, employees may not be required to perform their job functions or be paid less than the minimum wages, however only in the case if a full working time has been agreed upon in the employment agreement.  

In order to facilitate the situation of employers, the state will contribute to the maintenance of working places with subsidies. Employers may appeal regarding them to the Employment Services.

LEVELS OF SUBSIDIES:

  • 90 percent of the employee’s gross wages, but not more than EUR 607 gross. 
  • 70 percent of the employee’s gross wages, but not more than EUR 910.5 gross.

In order to get a subsidy, initially it is sufficient to submit to the Employment Services a completed and signed offer, a request and copies of documents on the downtime imposed on specific employees. All document forms are available on the website of the Employment Services. When applying for a subsidy the following month, submission of the documents in support of the wages paid out to employees will be required.

OBLIGATIONS OF THE EMPLOYER. When announcing downtime for the employee, the employer will have to inform thereof the State Labour Inspectorate. Such a requirement is applied to avoid the situation that smaller wagers are paid to an employee subjected to downtime, yet s/he is required to appear at work. 

If such a situation occurs, the subsidy shall be terminated for the employer, whereas the portion already paid out will have to be returned by the employer within two months. 

Employers who have used subsidies will also have to retain at least 50 percent of their working places for at least 3 months from ending the subsidy payment. 

In this case we imply the preservation of working places for at least half of the employees who will be paid a subsidy, except for the cases when an employee is dismissed after a probation period on the employee’s initiative without valid reasons, also on the employer’s initiative  through the employer’s fault, absence of will of the parties to the employment agreement, or upon an employee’s death.

If after ending the subsidy payment the employer will fail to preserve 50 percent of its working places for 3 months for the employees who have been paid subsidies, then it will not be able to participate in the measures for implementing local occupancy initiative projects on supported employment, subsidies for workplace creation and adaptation for 12 months.

WHO MAY NOT USE THE SUBSIDIES. During downtime, state subsidies may not be used by budgetary institutions, bankrupt or undergoing liquidation employers and legal persons which manager or other responsible persons has received a fine from the Employment Services for illegal work, violations of foreigner’s employment procedure or non-declared work, or an administrative fine for illegal work according to the Code of Administrative Violations of Law.

There will be no possibility to get subsidies if during the last year the employer’s manager or other responsible person has received more than one administrative fine for violations of employment legislation, legal standards on occupational safety and health , concealment of occupational accident, irregularities of the established procedure for notification and investigation, calculation of remuneration and payment thereof, employment conditions for temporary employees, also commercial or business activity.  

Prioritisation of employer’s actions

  1. The employer shall announce downtime for the employee or a group of employees. 
  2. Within 1 working day shall inform the State Labour Inspectorate thereof. If downtime has been announced by 8 April, notification thereof within 3 working days  shall be sufficient. 
  3. The employee shall appeal to the Employment Services for a subsidy – initially, until the end of the current month, in other  occasions – until the 15th day of the month inclusive.  
  4. The Employment Services shall take a decision within 5 working days. 
  5. The subsidy shall be paid until the end of the current month. 

Fixed rate benefit for self-employed persons 

Self-employed persons who have no employment relationships and do not receive employment income may apply for a fixed-rate allowance of EUR 257 a month. This benefit shall not be included into insured income and shall not have an effect on any other benefits, and shall be receivable together with other social insurance benefits – sickness, maternity, child care, unemployment or pension. 

During the emergency situation or quarantine, self-employed persons will also be able not to pay mandatory health insurance contributions which shall be payable within two years after the end of the emergency situation and quarantine.

As it is provided for in the Law on Employment, a fixed-rate benefit shall be payable if a self-employed persons meets the following conditions:

  • Self-employed activity has been registered for a period of at least 3 months during the last year and was not deregistered by the day when the Government announced the emergency situation and the quarantine (the period from March 16, 2019 to March 16, 2020 shall be taken into consideration). 
  • S/he does not work according to an employment agreement, does not have legal relationships equivalent to employment relationships, or does not receive employment income.  
  • A legal person may not have the status of a liquidated company or a company in bankruptcy. 

An allowance will be available also to the persons exempt from the payment of social insurance benefits: pensioners, disabled who have started activities for the first time.  

For a self-employed person, a benefit shall be payable for the preceding calendar month and will amount to EUR 257.

If the period of the emergency situation and the quarantine is shorter than a calendar month, the level for the allowance payable to a self-employed person shall be reduced proportionately.
One self-employed person shall be granted and paid one benefit irrespective of the number of activities s/he is engaged in. 

Benefit for a self-employed person shall be suspended when the Government recalls the emergency situation or the quarantine (cancellation of one of these regimes is sufficient) or a person no longer fulfils at least one of these conditions.  

Benefit for self-employed persons shall be allocated by the Employment Services. It shall be awarded within 3 working days after a person’s appeal to the Employment Services. 

We hereby remind that self-employed persons imply owners of sole proprietorships, true partners of small partnerships, general partnerships and limited partnerships, persons engaged in individual activities (including on a business licence), farmers and their true partners whose farm is equal to 4 ESU or bigger, members of households, persons receiving income according to copyright agreements or income from sports and performing artist’s activity.