Compensation of wage costs
Support for parents
- Caregiver allowances are paid by the state to employees (one parent/caregiver) who must take care of children under 13 years of age and older handicapped children not attending school during the COVID-19 emergency when schools and other child care facilities are closed. The allowance amount was temporarily raised from 60% to 80% of the average reduced income of the employee (the change applies retrospectively since 1 April 2020). For a self-employed person, the compensation was temporarily raised from CZK 424 to CZK 500 per day.
Support for employers
- Anti-virus Program - the program aims to protect jobs with employers directly affected by government restrictions connected with COVID-19. A wage allowance will be provided by the Labor Office of the Czech Republic based on an application submitted by the employer. The original proposal of five modes has been merged into two modes (Government order from 31/03/2020).
- Mode A:
- In the case of quarantine, the employee receives compensation of 60 % calculated from his average reduced income (the cause of the problem is on the employee´s side);
- In the case of business closure due to the Government´s order, the employee receives 100 % of his average salary (the cause of the problem is on the employer´s side);
- Mode B:
- Limited available workforce on the side of employer caused by the order of quarantine or forced leave due to childcare (ošetřovné), which affects more than 30 % of employees – the employee receives compensation of 100 % of his average salary;
- Limited available input (services, material, products) necessary for the business´ activity – the employee receives compensation of 80 % of his average salary;
- Limited demand for the business´ services and products - the employee receives compensation of 60 % of his average salary;
- In the case of Mode A, the state substitutes 80 % of paid salary including taxes, up to 39 000 CZK.
- In the case of Mode B, the state substitutes 60 % of paid salary including taxes, up to 29 000 CZK.
- The maximal amount of compensation is derived from average super-gross salary including taxes (48 400 CZK), in Regime A – 80 %, and in Regime B – 60 %, of this amount.
Support for self-employed
- Compensation Bonus amounting to CZK 44,500 or a maximum of CZK 500 for each calendar day of the bonus period (12 March – 8 June 2020).
- The Ministry of Finance has modified the conditions of support for self-employed persons, they are now set as follows:
- The activity performed is the main activity;
- The activity performed may also be minor activity if the self-employed person is not simultaneously an employee;
- The self-employed person was already carrying out the activity before 12 March 2020;
- Alternatively, it may also be a self-employed person whose activity was interrupted at any time after 31 August 2019 (seasonal business);
- A self-employed person declares that he/she was wholly or partially unable to perform its activity above the normal level due to the health threats related to the occurrence of coronavirus or government emergency measures;
- The applicant must prove the fulfilment of these facts by an affidavit.
- It has to be proceed through the legislative process that could be completed this week, by 12 April at the latest
- The state will pay 30-80% of wage, depending on the case.
- Caregiver allowances as mentioned on the Compensation of wage costs
- For Self-employed: The state will pay 30-80% of wage, depending on the case.
Reduced penalties for employers, late payment of social security premiums
- The government approved a legislative proposal reducing penalties imposed on employers for late payment of social security premiums and contributions to the state employment fund—relief offered in reaction to the coronavirus (COVID-19) pandemic.
- The draft legislation concerns amounts paid by employers that are 24.8% of their employees’ wages (employer’s premiums) payable for the calendar months of May to July 2020. If the premium for these months is paid no later than by 20 October 2020, the employer would be required to pay only 20% of the standard penalty for late payment. The reduced penalty would correspond to an approximately 4% relief.
- Penalties for late payment of health insurance premiums for the period from March to August 2020 have already been waived, provided that the premiums are paid no later than by 21 September 2020. The waiver of penalties for health insurance premiums should apply to late payment of both the employer and employee shares of premiums.