Czech Republic: New and extended programs to support employers, employees (COVID-19)

Czech Republic: New and extended programs

The government has approved a series of compensatory measures with a total value of CZK 10 billion in response to the coronavirus (COVID-19) pandemic.

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Some measures are new, while others extend existing support measures intended to help employers preserve jobs.


New measures

The government in January 2021 initiated a new program for certain businesses—in particular restaurants, retail outlets, and services that sell goods or services and that were at least partly closed or banned because of emergency measures—for the period from 14 October 2020 to 10 January 2021. The program allows a payment of CZK 400 for each day when the business activity was curtailed, for every full-time employee (and part-time employee whose entitlement will be recalculated using the appropriate coefficient) and/or for workers of sole-proprietorships (self-employed persons).

Employees in sectors that receive support under other program are not to be included in the calculation. Applications are to be submitted electronically via the Ministry of Industry and Trade’s agenda information system, and the maximum support cannot exceed €800,000 per enterprise.


Extended measures

The government in December 2020 extended an existing antivirus program until the end of February 2021, thereby extending all existing regimes. The parameters of the antivirus programme’s current settings have not been amended for 2021.


Pending legislation

The antivirus program was extended in response to the deteriorating epidemic situation and to address and provide unemployment support. The kurzarbeit (short-time working) scheme was intended to replace the antivirus program beginning 1 January 2021. The bill on kurzarbeit is pending a second reading in the Chamber of Deputies.

Unlike the one-time support provided under the antivirus program, kurzarbeit would put into place a legal requirement for support at a time of partial unemployment that would be activated whenever the Czech economy suffers a crisis similar to the current one. The kurzarbeit scheme would therefore be activated whenever an increase in unemployment occurs at a rate set by law and based on a government decree in emergencies (such as natural disasters and pandemics). Similar to the antivirus program, kurzarbeit is designed to help companies that must partly curtail their operations in emergency situations. For the employees of such companies, the government would pay 70% of net wages, depending on the employee’s activity and time spent in kurzarbeit, over a maximum period of 12 months.

The final version of this legislation remains uncertain.

Read a January 2021 report prepared by the KPMG member firm in the Czech Republic

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