Government measures to boost employment

At its session on 19 March 2020, the government approved the first two measures aiming to provide support to employers, employees, and the self-employed affected by the COVID-19 pandemic. The measures further specify carer’s allowances and an ‘antivirus programme’ to compensate wage expenses. The government is also planning to adopt other measures, such as the postponement or waiver of insurance contributions for the self-employed or the introduction of kurzarbeit (employees working shorter hours, with a portion of wages compensated by the state, and employers committing not to lay off any employees).

Carer’s allowance

The carer’s allowance concept is currently regulated by the Act on Sickness Insurance. The government-approved amendment to this concept that should be discussed by the parliament in a state of legislative emergency on Tuesday, 24 March 2020, will directly affect this act. Once extraordinary circumstances subside, the original concept’s effectiveness will be re-established. The proposed regulation introduces the following changes:

  • Carer’s allowances will be provided over the entire period of emergency measures associated with the pandemic, i.e. as long as schools and other children’s facilities remain closed, extending the existing limit of nine or sixteen days and applying to parental care for children younger than 13 years.
  • Carer’s allowances will be paid by the Czech Social Security Administration over the entire duration of the current extraordinary circumstances, even if care facilities have been closed due to the pandemic based on a decision of a facility’s incorporator.
  • The entitlement to a carer’s allowance also arises upon the closure of a facility caring for persons with disabilities, without the care recipient having to fulfil a certain age limit, but only if they live together with the carer in a household.
  • Carer’s allowances will also be paid retrospectively. Families that have been receiving this allowance will not have to apply again.

The provisions of the Act on Sickness Insurance remain in effect, in particular:

  • The basis for the calculation of a carer’s allowance are the average daily earnings for the reference period, usually the preceding twelve months, adjusted using three reduction thresholds to determine the reduced daily assessment base. The carer’s allowance is paid for each calendar day and amounts to 60% of the reduced daily assessment base
  • The carer’s allowance pertains to one parent (or another beneficiary) only; parents (or other beneficiaries) may switch roles once during the time of providing care.

As for the self-employed, their loss of earnings due to having to care for their children will be compensated from the Ministry of Industry and Trade’s programme; the compensation is expected to amount to approx. CZK 424 per day.

Compensation for paid wages and salaries (Antivirus Programme)

Employers whose business activities are threatened by COVID-19 will be provided with contributions to fully or partially reimburse wage compensation payable to employees due to an impediment to work on the employee’s part (a quarantine order) or on the employer’s part (closure of premises due to a government decision) if it can be proven that the impediment to work occurred due to COVID-19. The basic structure of the proposed regulation is as follows:

  • Funds will be provided under the Ministry of Labour and Social Affairs’ programme, through labour offices.
  • The amount and the period over which contributions are to be paid depend on the reason of the impediment to work, which will be assessed on a case-by-case basis for each individual employee.
  • Employees subject to a quarantine order will receive wage compensation equal to 60% of the average assessment base, while their employers will receive a contribution equal to full wage compensation.
  • Where it is impossible to assign work to employees due to extraordinary governmental emergency measures, i.e. when employers are ordered to close their premises, employees will receive 100% wage compensation and employers will receive a contribution equalling to 80% of paid wages.

According to the Ministry of Labour and Social Affairs, total expenses expected to be incurred in connection with these measures are CZK 1.2 billion. The exact terms and conditions should be published in the upcoming days, along with other programmes currently under way.

The government will also discuss other measures to boost business and employment, such as the postponement or waiver of insurance contributions for the self-employed or the introduction of kurzarbeit (employees working shorter hours, with a portion of wages compensated by the state); this scheme involves agreements between employers and the state: the state helps employers overcome difficult economic times, while employers contractually commit not to lay off any employees.

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