PROVISION OF COMPENSATION FROM THE STATE OF EMPLOYERS IN CONNECTION WITH THE ANNOUNCED EMERGENCY STATEMENT

24 Mar 2020

The above-mentioned issue is a topic that needs to be further elaborated and specified by a Council of Ministers Decree. The draft of that decree has already been prepared and sent for consultation with employers and unions and follows its adoption in the coming days. Below, in this presentation, we will develop the main points governing the criteria, procedure, documentation and all that is relevant to the applicant-employer regarding this State aid. The writing is on a project basis that is pending final adoption.

 

CRITERIA TO WHICH EMPLOYERS SHOULD MEET:

1. As stated in para. 6 of the MADSE, the State, represented by the National Social Security Institute, will cover, through the Unemployment Fund, 60% of the salaries of employees who would otherwise lose their jobs. Against this assistance, employers are obliged to retain their jobs, cover the remaining 40% of the remuneration and not to dismiss those employees within 3 months after the 3 months in which they received compensation.

2. The right to support by the State will be granted only to companies which have ceased to operate at least 50% of their personnel on the date of issuance of the order that is ceasing all or part of the activity due to the state of emergency. At least 50% of their employees must work in one of the 16 economic activities listed in the table below (Annex 1).

3. Another condition for applicants is that they have not made redundancies in the period during which they will receive compensation. It will be given for a period of up to 3 months and is scheduled to take effect retroactively on March 13 i.e. if the company wants full compensation, it should not have fired staff since March 13.

4. It is also essential that companies have no budgetary obligations at that date, meaning for taxes and insurances, to the municipality, not declared bankruptcy or are not in liquidation proceedings, they must not receive funds under European programs or from the budget, have no penal decree entered into by the NSSI for the last 6 months and should not have committed violations of labor law.

 

APPLICATION PROCEDURE:

The Executive Director of the Employment Agency will issue an order to open a procedure for applying for employers to pay compensation. Information on the terms and conditions for applying will be published on the website of the Employment Agency and on the information boards in the Directorates of the Labor Office.

1. The employer shall submit, including by electronic means, to the Directorate "Labor Office", servicing the territory of employment of his employees, an application for payment of compensations in accordance with a model approved by the Executive Director of the Employment Agency.

The application shall be accompanied by:

 - Order for termination of employment in connection with a state of emergency;

 - a model declaration that the employer fulfills the conditions for applying;

 - a list of employees for whom an application for compensation is submitted in accordance with the Decree of the Council of Ministers. The list contains data on persons (three names and personal identification number) and the number of working days for the termination of employment.

 - a statement containing details of the employer's payment account.

2. A committee appointed by an order of the Director of the "Labor Office" shall examine and verify the documents submitted within 7 working days of the submission of the application. The Commission shall decide on the compliance or non-compliance of the employer with the compensation requirements.

It is the duty of the Director of the Labor Office Directorate to send to the Employment Agency a list of employers who meet the requirements for compensation, the decisions of the commission and the lists of employees provided by the employers.

The Employment Agency should send electronically to the National Social Security Institute, a summary information on the approved candidates, and the Labor Office Directorate to inform the employers about the Commission decision.

3. The National Social Security Institute shall pay employers compensation on the basis of the summary information provided by the Employment Agency.

 

CONSEQUENCES:

It is the obligation of the employers, in the case of reimbursement of work during the period of payment of the compensation, to notify in writing the Employment Agency within 3 days from the date of issuance of the order for reinstatement of work.

Also, an employer who has received compensations under the Decree of the Council of Ministers and has not fulfilled his obligation to keep the employment of the persons for whom he has received compensation for a period not less than 3 months after the expiry of the period for which he is paid compensations and fails to fulfill its obligation not to terminate employment contracts of employees on the grounds of Art. 328, para. 1, items 2, 3 and 4 of the Labor Code, for the period for which compensation is paid, shall reimburse the compensations provided, together with the statutory interest rate from the moment of receipt until their final payment.

 

(Appendix № 1).

List of economic activities under art. 2, item 2, according to the Classification of Economic Activities (NACE.BG-2008)

Code under NACE-2008

Title of the position

47

Retail trade, except of motor vehicles and motorcycles  except 47.11 (Retail sale in non-specialized stores with food, beverages and tobacco) and 47.2 (Retail sale in specialized stores of food, beverages and tobacco)

49.1

Passenger rail transport, long distance

49.3

Other passenger land transport

50.1

Passenger sea and coastal transport

50.3

Inland passenger water transport

51.1

Passenger air transport

55.1

Hotels and similar accommodation

55.2

Tourist and other short-term accommodation

56.1

Activity of restaurants and fast food establishments

56.3

Activity of drinking establishments

59.14

Film projection

79

Travel agency and operator activity; other travel and booking activities

90

Artistic and creative activity

91

Other cultural activities

93

Sports and other recreational activities

96.04

Maintaining good physical condition

 

* A developing topic.

**The information provided doesn not, and it is not intended to, constitute legal advice, but expresses the view of the author on the matter. Legal advices for a case could be provided only after its complete examination.

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