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GEO 30/2020 – Social protection measures during the state of emergency due to COVID-19

GEO 30/2020 – Social protection measures

The measures introduced by GEO 30/2020 come into force on 21 March 2020; they apply during the state of emergency state and they relate to:

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Rene Schob

Partner, Head of Tax & Legal

KPMG in Romania

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Related content

  • The criteria for sending employees into technical unemployment and minimum income ensured for freelancers working in industries where activity is reduced or interrupted due to the pandemic.
  • The conditions for granting free paid days to parents, in order to supervise their children during the temporary closure of educational establishments.
  • The online submission of the documentation needed in order to gain access to social benefits.
  • The measures for ensuring continuity in the granting of return to work incentives and child care allowance, as well as for facilitating access to medical leave and medical leave indemnities for quarantined persons.

General aspects

Government Emergency Ordinance no. 30/2020 (GEO 30/2020) has been published in the Official Journal of Romania (no. 231/21.03.2020) and Government Decision no. 217/2020 on the application norms for Law no. 19/2020 on granting free paid days to parents for the purpose of child care in the case of temporary closure of educational establishments (GD 217/2020) has been published in the Official Journal of Romania (no. 230/21.03.2020). The two legal texts have entered into force on their publication date, 21 March 2020. Below, we present the key points of the two government decisions.

Technical unemployment allowance

The Labor Code provides that employers can decide unilaterally to suspend individual employment agreements of their employees and place the employees in technical unemployment. The employer is required to ensure from its own funds the payment of a minimum allowance of 75% of the employee’s base salary.

However, if the employers meet one of the following criteria, during the state of emergency, the technical unemployment allowance can be supported by the Unemployment Insurance Budget up to the limit of 75% of the average gross salary provided for under the law for the social insurance budget for 2020 (i.e. RON 5,429):

  • Their activity is interrupted, totally or partially, due to decisions issued by the relevant authorities and they have obtained the Certificate for Emergency Situations issued by the Ministry of Economy, Energy and the Business Environment as per art. 12 of Decree no. 195/2020. The Ministry of Economy, Energy and the Business Environment issues the Certificate for Emergency Situations based on a methodology which will be defined by Order.
  • Their activity is reduced as a result of the effects of the COVID-19 pandemic and they no longer have the financial ability to cover salary payments for all their employees. This category of employers can benefit from the GEO 30/2020 provisions on technical unemployment for up to 75% of their employees whose individual employment agreements were active when GEO 30/2020 entered into force and under the condition that they submit an affidavit stating that:
    • Their cashed revenues registered a decrease of minimum 25% in the month prior to the one when they submit the affidavit, from the average level registered during January – February 2020 (the affidavit template will be provided for by a joint Order of the Labor and Social Protection Minister and the European Funds Minister) and
    • They do not have the financial ability to pay all their employees.

The technical unemployment allowance is supported by the Unemployment Insurance Budget as a gross amount, for which the employer is required to calculate and retain the corresponding personal income tax and social security contributions (i.e. personal income tax, social security contribution and health insurance contribution). The technical unemployment allowance is not subject to the work insurance contribution due by the employer. The declaration and payment deadline for the fiscal liabilities related to the technical unemployment allowance is 25th of the month following the month when the allowance has been received from the Unemployment Insurance Budget, inclusive.

KPMG comment

GEO 29/2020 also provides that no late payment interest and penalties are owed for fiscal liabilities which become due after 21 March 2020 and are not paid up to 30 days from the end of the state of emergency, as they are not considered overdue fiscal liabilities. At the same time, the budgetary claims-related foreclosure proceedings are suspended or will not begin. The measures mentioned above apply during the state of emergency and for 30 days after it ends.

In order to recover the amounts paid as technical unemployment allowances, employers should submit the following documents to the local or Bucharest unemployment agency:

  • An application form, in the format provided for under Appendix 1 and 2 of GEO no. 30/2020 and
  • A list of employees who will benefit from the technical unemployment allowance, with the affidavit of the employer’s legal representative drafted as set out in Appendix no. 3 of GEO no. 30/2020.

The documents have to be submitted in the current month for the allowance paid by employers in the previous month, and the amounts will be reimbursed from the Unemployment Insurance Budget within a maximum of 30 days from the date when the documents are submitted.

GEO no. 30/2020 also states that other professionals, as defined in the Civil Code (Law no. 287/2009), who are not employers, but whose activity is interrupted totally or partially due to the decisions issued by the relevant authorities during the state of emergency, will benefit from an allowance equal to the minimum gross salary for 2020, supported by the General Consolidated State Budget. These provisions basically refer to freelancers registered as authorized individuals (persoane fizice autorizate), family enterprises or individual enterprises.

KPMG comment

Both categories of employers which qualify under the provisions mentioned above (those which interrupt their activity totally or partially due to the decisions issued by the authorities or those which reduce their activity due to the COVID-19 pandemic), as well as the other professionals mentioned under GEO no. 30/2020 as per the previous paragraph, can prepare the relevant documentation to recover the technical unemployment allowances only after the relevant authorities publish the corresponding Orders on the Certificate for Emergency Situations and the template for the affidavit on activity reduction and lack of financial capacity.

The allowance for free paid days granted for child care in the case of temporary closure of educational establishments

On 17 March 2020 Law no. 19/2020 entered into force on granting free paid days to parents for the purpose of child care in the case of temporary closure of educational establishments, as further amended by GEO no. 30/2020, which entered into force on 21 March 2020, i.e. at the same time as GD no. 217/2020 on the application norms for Law no. 19/2020.

Free paid days are granted to parents for child care during the entire period in which the relevant authorities have decided to close down educational establishments, due to unfavorable meteorological conditions or *other extreme situations”, such as the current COVID-19 pandemic. The free paid days are the working days during the state of emergency, but with the exception of school vacation periods.

The allowance for the free paid days is 75% of the base salary for one worked day, but no more than 75% of the average gross national salary (i.e. RON 5,429). The allowance is subject to personal income tax and social security contributions (i.e. personal income tax, social security contribution, health insurance contribution and work insurance contribution). Only the net value of the allowance paid by the employer (the amount actually received by the parent) can be recovered from the Guarantee Fund for the payment of salary claims, so the corresponding personal income tax and the social security contributions are borne by the employer. To recover the net allowance, employers should submit a request to the local or the Bucharest unemployment agency, accompanied by the following documents:

  • A list of employees who have benefitted from free days, as well as from the allowance.
  • Copies of the monthly payroll report, confirming payment of the allowance.
  • The affidavit of the employer’s legal representative that attests that the above mentioned list comprises employees who meet the conditions provided for under Law no. 19/2020.
  • Proof of payment of the taxes and social contributions related to the allowance granted under Law no. 19/2020.

The documents have to be submitted to the relevant authorities within a maximum of 30 days from the payment of the social security contributions and personal income tax corresponding to the allowance for free paid days. The reimbursement of the net allowance will be made from the Guarantee Fund within 60 calendar days of the date when the documents are submitted.

The following are the conditions for granting the free paid days allowance and exceptions.

The free paid days are granted upon the request of one of the parents, lodged with their employer. The request should be accompanied by a copy of the birth certificate of the child/children and an affidavit from the other parent attesting that they have not lodged a similar request with their employer and they are not on annual holiday or unpaid leave (template provided for under GD no. 217/2020).

The rights are also granted to the following categories:

  • The parent or the legal representative of a child with a serious disability not attending school courses who has opted to benefit from the allowance granted under Law no. 448/2006 on the protection and promotion of disabled individuals’ rights, as republished and further amended (Law no. 448/2006), but only under the condition that normal daily assistance services received have been suspended as a result of unfavorable climate conditions or other extreme situations as determined by the relevant authorities.
  • A parent or legal representative who has in their care, supervision and under their financial support (Ro. “în întreținere”) an adult individual with a serious disability or a disability that requires a personal assistant (as aid) who has opted to receive an allowance under the conditions of Law no. 448/2006, but only provided that they normally benefit from daily assistance services which have been suspended as a result of unfavorable climate conditions or other extreme situations as determined by the relevant authorities.

The parents (as defined above) who request free paid days must meet cumulatively the following conditions:

  • They must have children of up 12 years old or have a disabled child up to the age of 18, enrolled with an educational establishment.
  • They must have a place of work which does not allow for work-from-home or teleworking.

The rights are not granted if one of the child’s parents are in one or more of the following situations:

  • He/she is on child care leave to care for children of up to 2 years old, or 3 years old in case of a disabled child.
  • He/she is the personal assistant of one of the children in care.
  • He/she is on annual holiday or unpaid leave.
  • He/she is in a state of technical unemployment.
  • He/she does not receive salary or assimilated income, income from independent activities, income from intellectual property rights, or income from agricultural, forestry and pisciculture activities subject to income tax.

The law applies to all public and private sector employees. However there are a few exceptions.

First, certain categories of employees (e.g. in undertakings which form part of the national defense system, in penitentiary units, personnel from the public health system etc.) will not benefit from the free paid days granted under this law. However they will receive an allowance, supplementary to their salary rights, which corresponds to a number of working days approved through Government Decision, if the other parent does not benefit from the rights falling under Law no. 19/2020 or this type of allowance.

Second, for employees in undertakings which are part of the national energy system, in undertakings with continuous activity, in the health and social assistance sectors, in telecommunications, public transport and public sanitation services, as well as the supply of the population with gas, electricity, heat and water, food retail and distribution, production and distribution of medicine and medical equipment, gas distribution, pharmacies etc., the free paid days are granted only with the employer’s consent. Employers in the industries mentioned above may grant the free paid days only after exhausting all the options provided by the applicable legal provisions for the performance of activity and under the obligation of ensuring the continuity of activity, including by implementing individualized work schedules, shift working, teleworking or work-from-home.

Online submission of applications for social benefits

GEO no. 30/2020 establishes the possibility for individuals to use electronic mail as the main communication means with the social assistance-related authorities. Hence, individuals can submit in this way the application and necessary documents for obtaining social benefits mentioned in GEO no. 30/2020, as set out below, to all the local agencies, local public administration institutions or unemployment agencies:

  • Applications for child care for children of up to 2 years old.
  • Applications for the return to work incentive (Ro: “stimulent de inserție”).
  • Applications for state child care allowance.
  • Applications for unemployment allowance.
  • Applications for other social benefits.

At the same time, during the application of Decree no. 195/2020, the authority responsible for issuing the approval/ rejection/termination/suspension of the right to social benefits also has the option to send the resolution to the beneficiary by electronic mail.

As an exception, the terms provided for under the law for issuing the resolution for social benefit applications may be additionally extended by up to 15 working days, in order for the authorities to carry out further verification, certification and conformity validation of the documents received by electronic mail.

KPMG comment

The possibility to communicate with the local agencies, local public administration institutions or unemployment agencies by means of electronic mail is applicable only for those institutions that have in place electronic reception systems compliant with GDPR legislation.

Public institutions must introduce within 10 days the electronic mail system and the relevant procedures for managing by electronic mail the applications for social benefits. At the same time, within the same 10 day period, public institutions must publish on their websites the relevant procedures and application templates.

Payment of the return to work incentive, as well as of medical leave indemnities

As a measure of social protection, in the context of the declared state of emergency in Romania, GEO no. 30/2020 guarantees the payment of the return to work incentive (Ro: “stimulent de inserție”) to all entitled persons, for a continuous period of 90 days, if the individual concerned is in one or more of the following situations:

  • He/she is on medical leave due to incapacity for work, preventative medical leave or child care medical leave.
  • He/she is on paid leave for parents, as granted by Law 19/2020.
  • He/she is in a state of technical unemployment.
  • He/she has had their employment agreement suspended or terminated as a result of the state of emergency, in accordance with the provisions of the law.

GEO no. 30/2020 also makes changes to GEO no. 158/2005 on medical leave and medical leave indemnities (GEO no.158/2005):

  • Medical Leave for quarantine: all persons insured in the public health system, as defined by GEO no. 158/2005, are entitled to medical leave for quarantine, with no minimum period of contribution to the Health Insurance Fund required. 
  • Other provisions: As an exception to the provisions of GEO no. 158/2005, medical leave certificates which include the 91st day or exceed 183 days of illness, granted during the state of emergency established by Decree no. 195/2020, may be issued and paid without the authorization of a specialized social insurance doctor.
     

© 2020 KPMG Tax SRL, a Romanian 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.

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