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Overview of employment protection measures

Overview of employment protection measures

The Croatian Government has adopted new measures with the goal of preserving jobs at employers whose businesses have been negatively affected by the Coronavirus (COVID-19).

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1. Job preservation grant for certain sectors affected by COVID 19 – July and August 2020

An employer operating in the following sectors:

• transport and storage,
• accommodation services, and food and drink preparation and service,
• administrative and auxiliary services industry,
• arts, entertainment and recreation,
• organizers of cultural, business and sporting events etc.
which experienced a decrease in revenue due to COVID-19 of at least 60% in June/July 2020 compared to June/July 2019 may submit an application for a job preservation grant. The value of the grant is HRK 4,000 monthly for each full time employee, a proportional value for each part-time employee, and HRK 250 for any employee toward pension insurance contributions based on individual capitalized savings. In order to be eligible for the grant in July, stated decrease in revenue must be experienced in June 2020 and equally, for the grant in August, decrease in revenue must be experienced in July 2020.
 
Applications for the grant may be submitted:
 
• between 8 July and 31 July 2020 – for grants for July and August 2020;
• between 1 August and 31 August 2020 – for grant for August.
 
2. Job preservation grant for micro-entrepreneurs in July

Employers with up to 10 employees which can prove a decrease in turnover of at least 50% in June 2020 compared to June 2019
(to be determined based on VAT returns submitted to the Tax Authority) may receive a grant of HRK 2,000 for the month of July for each full-time employee or a proportional part for each part time employee.

Applications for the grant may be submitted between 7 July and 31 July 2020.

3. Grant to support reduced working hours during June to December 2020
 
Eligible employers may receive a grant to offset an eligible employee’s potential loss of employment income if such an employee's working hours are temporarily reduced in one or more months in the period June to December 2020.

Eligible employers
 
• employers with between 10 to 50 employees must submit a grant request for at least 20% of all employees;
• employers with 51 or more employees must submit a grant request for at least 10% of all employees.
 
Value of the grant:
 
• an eligible employer may receive a grant of up to HRK 2,000 per month per eligible employee
• an eligible employee is an employee whose working hours have been temporarily reduced by no more than 50% of her/his contracted monthly working hours.
 
Eligibility period of the grant:
 
• between 1 June and 31 December 2020.

Eligibility criteria for receipt of the grant
 
Eligible employers must:
 
• expect a decrease of at least 10% in the total monthly working hours of all eligible employees, during the month for which the grant is sought.
• prove that the COVID-19 epidemic has had a negative effect on its business thereby justifying the need for the expected decrease in total monthly working hours by:
  - proving a decrease in turnover of at least 20% in the month for which the grant is sought, compared to the same month of the previous year (to be determined based on VAT returns submitted to the Tax Authority), and
  - providing a reason for the decrease, such as decrease in orders, inability to deliver finished products etc.
 
Restrictions and limitations
 
An eligible employer receiving the grant undertakes to abide by certain restrictions and requirements, for example, payment of the agreed or prescribed salary, no distribution of profits, shares, stock options or management bonuses with a certain period.
 
It is important to understand all of the criteria and obligations related to this grant. To determine how these measures may suit your business, KPMG is available to review your circumstances and support you in the grant application process.
 
Please contact KPMG’s Legal Team for further advice and assistance.
 

Hrvoje Pajtak 
Attorney at Law
Tel. + 385 1 5390 062
hpajtak@kpmg.com

Suzana Delija 
Attorney at Law
Tel. + 385 1 5390 252
sdelija@kpmg.com

Nevena Arar
Legal Trainee
Tel: +385 1 5390 275
narar@kpmg.com 

 

KPMG Croatia d.o.o
EUROTOWER, Ivana Lučića 2A/17
Tel: +385 (0)1 5390 000
Fax: +385 (0)1 5390 111
info@kpmg.hr
home.kpmg/hr

© 2020 KPMG Croatia d.o.o., a Croatian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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