Terms and conditions for employers compensation in relation to the 60 to 40 payment decree

I. ELIGIBLE EMPLOYERS

Employers who are entitled to compensation are conditionally divided into two groups, as follows:

1. Employers whose activity has been suspended by an order of a state body – in this case the decree of the Minister of Health and on the basis of it the employer has issued an order to suspend the activity of the whole enterprise or part of it. The suspension order shall be dated 13.03.2020 until the end of the state of emergency. This group of employers includes all those active in the economic activities listed in Appendix No 1, namely: “Retail” (excluding car and motorcycle trade), “Land transport”, “Passenger and air transport”, “Hotel industry” “,” Restaurant industry”,” Drinking Activity “,” Movie Theaters “,” Tourism Activity “,” Artistic and Creative Activity “, “Preschool and School Activity “- in the section for private kindergartens, and “Sport “.

2. Employers who, by virtue of their order pursuant to Art. 120c of the Labor Code have suspended the work of the whole enterprise, part of the enterprise or individual employees, as well as employers, who by their order pursuant to Art. 138a, para. 2 of the Labor Code introduced part-time work for the whole or part of the enterprise as a result of the declared state of emergency. The order for termination of employment or introduction of part-time work must be issued for the period of emergency or for part of it, at the discretion of the employer, according to the particularities of the specific economic activity. This includes all economic activities not included in the first group, with the exception of Agriculture, Forestry and Fisheries, Financial and Insurance Activities, Government, Education, Human Health and Social Work, “Activities of households as employers, undifferentiated activities of households for the production of goods and services for own consumption” and “Activities of extraterritorial organizations and services”.

II. CONDITIONS FOR APPLICATION

The conditions that both groups of employers must meet are:

• be local natural or legal persons, as well as foreign legal entities, carrying on business in the Republic of Bulgaria;
• have no tax obligations and compulsory social security contributions within the meaning of Art.
162, para. 2, item 1 of the Tax and Social Insurance Procedure Code to the state or municipality established by an act of a competent authority and for which the employer has not taken any action for deferral, postponement or collateral;
• have not been declared bankrupt or are not in bankruptcy proceedings;
• retain the employment of workers and employees for whom they have been compensated for a period not less than the period for which the compensations have been paid;
• do not terminate the employment contracts of employees on the grounds of Art. 328, para. 1, items 2, 3 and 4 of the Labor Code during the period for which they are compensated;
• do not have a penal decree or judgment established by an enforceable law, violation of Art. 61, para. 1, Art. 62, para. 1 or 3, Art. 63, para. 1 or 2, Art. 118, Art. 128, Art. 228, para. 3, Art. 245 and Art. 301-305 of the Labor Code or Art. 13, para. 1 of the Labor Migration and Labor Mobility Act during the period of 6 months prior to the issuance of the termination order;
• workers for whom compensation is sought were employed by the employer prior to the date of the declaration of emergency;
• workers for whom compensation is sought have not taken temporary disability leave, pregnancy and maternity leave or adopting a child up to 5 years of age or raising a child up to 2 years of age during a period of emergency;
• for workers for whom compensation is sought, the employer does not receive funding for wages and social security contributions from the state budget, funds from the European Structural and Investment Funds or other public funds. According to the above conditions, if you are an employer from the so-called first group, you have to declare that the field of economic activity is one of those listed in Appendix No 1. If you fall in the second group of employers, revenue should be reduced by 20 percent in the month preceding the month of application for payment of compensation, compared to the same month of the previous calendar year, if the company was registered before 1.03.2019. If the commercial registration of the employer occurred after 01.03.2019 there should be a decrease of 20 percent in the month preceding the month of the submission of the claim for compensation, compared to the average revenue for January and February 2020.

III. DOCUMENTS

Employers from both groups submit an application for payment of compensation to the Labor Office Directorate servicing the territory at the place of employment, in accordance with a sample approved by the Executive Director of the Employment Agency. The application must be submitted on paper or electronically – via the Secure Electronic Service System, signed by qualified electronic signature (QES), or by registered letter with acknowledgment of receipt through a postal operator.

The application shall be accompanied by:
1. Certified copy of the order of the employer for termination of work under art. 120c of the Labor Code or the order for establishing part-time work under Art. 138 a, para. 2 of the LC. Applies only to employers in the second group.

2. Declaration of the circumstances under Art. 2, para. 1, items 5 and 6 – according to the EA sample. Applies to both groups of employers.

3. Declaration by the employer and documents certifying the decrease of the sales revenue under art. 2, para. 2. Applies only to the second group of employers. It is to be filled in according to the EA sample

4. List of employees for whom an application for compensation is submitted in accordance with the decree containing details of the persons – three names, personal identification number or personal number, personal number of a foreigner, official number from the National Revenue Agency. For employees for whom the employer has established part-time work under Art. 138a, para. 2 of the Labor Code also specification of the duration of the part-time work established. The list shall be drawn up in accordance with the EA sample

5. A statement containing details of an employer payment account marked with an International Bank Account Number (IBAN).

The requested circumstances are filed ex officio by the Bureau of Labor.

IV. APPLICATION DEADLINES

The website of the EA states the application deadline from March 31 to April 21, 2020. The application period begins with the date of declaration of the state of emergency – 13.03.2020, respectively, from the date of issuance of the suspension of activity order or the order for the introduction of part-time work until the state of emergency is canceled, but not more than 3 months from 13.03.2020.

V. ADJUDICATION DEADLINES

The application for compensation is considered within 7 days of its receipt, and the employer is notified within 2 days of the adjudication.

Within 7 days, the Director of the Labor Office Directorate shall send to the Employment Agency a list of employers who meet the criteria for payment of compensation, the minutes of the Commission and the documents submitted in the applications. EA sends the NSSI an electronic summary of the information.

There is no provision for contesting refusals to pay compensation. On the other hand, there is no prohibition for the employer to reapply within the time limit announced, eliminating any irregularities in the documents on the basis of which the application was refused.

VI. PAYMENT OF COMPENSATIONS

No deadlines for payment of employers’ compensations by the NSSI were specified on the basis of the summary information provided by the Employment Agency.

It is undisputed, however, that each employer owes an on – time payment of the gross wage to workers, respectively to the proportionally reduced gross wage in the hypothesis of part-time work.

If the application is approved, the NSSI will transfer into the bank account of the employer a subsidy of 60% of the gross remuneration of the applied workers. If part-time work is introduced for part of or all of the workers, then the compensation is again 60%, but calculated in proportion to the hours worked, for no more than 4 hours a day. For example, if an employer switches to a 6-hour workday from 8 hours, he or she will receive 60% compensation for the remuneration due for those 2 hours, which reduces the workday or work pay respectively. The latter does not change the obligation of the employer to pay the full amount of the gross wage due for 6 hours a day.

In case of resumption of work or cancellation of the part-time employment order during the period of payment of the compensation, the employer shall notify in written form, including electronically, within 3 working days from the date of issuance of the resumption order.

The maximum period for which compensation shall be paid is until the end of the state of emergency, but not more than 3 months from 13.03.2020.

VII. COMPENSATION REIMBURSEMENT

The compensations received are subject to reimbursement by the employer when it is established that they did not pay the full amount of the gross remuneration and insurance for the period and the employee for whom they applied for, and when it is found that the employer did not retain employment and fired the employee unilaterally on the grounds of Art. 328, para. 1, items 2, 3 and 4 of the Labor Code or declare incorrect data on the decrease in sales revenues.
ADDITION TO THE RECENT AMENDMENTS:

On the Conditions for Receiving Compensation from Employers in order to Retain Employees in a State of Emergency, with the promulgated Law amending and supplementing the Emergency Measures and Actions Act, announced by a decree of the National Assembly of 13 March 2020, supplemented the conditions for payment of the aid, namely: employers will be paid compensation of 60% of the workers’ social security income for January 2020, as well as 60% of the contributions due, to be paid by the employer at his own expense. The latter NSSI will transfer up to 5 working days from the date of submission of the information by the Employment Agency.

The conditions to be met by the applicant employer, as well as the period for which they can apply, remain unchanged – during a state of emergency, but no more than 3 months.

The deadline for submitting compensation claims remains unchanged for now – until 21.04.2020.

For more information: 0887 631 861 Attorney at law Velislava Horozova