Measures provided by a proposal of Intervention Measures Act to curb the COVID-19 epidemic and mitigate its consequences for citizens and the economy

02 April, 2020

The Slovenian Government has proposed a new package of measures to curb the COVID-19 epidemic and mitigate its consequences. The proposal is extensive, so in this article we will highlight some of the most important measures proposed in order to preserve jobs and help companies. Pursuant to Article 20 of the proposal of Intervention Measures Act to curb the COVID-19 epidemic and mitigate its consequences for citizens and the economy (hereinafter "act proposal"), the measures provided by the act proposal will apply from 1 April 2020 to (at least) 31 May 2020. According to recent reports, the final draft law even stipulates that some measures will apply from 13 March 2020.

Additional measures for preserving jobs

The act proposal stipulates, that social security contributions for employees, who were ordered to temporary wait for work at home, will be paid by the Republic of Slovenia and not the employer. Under the new act proposal, the Republic of Slovenia will also cover the full cost of compensation (80% of the salary base) and not just 40% as it was provided by the Act Regulating the Intervention Measure to Reimburse Salaries and Contributions, that was adopted on 19 March 2020. Furthermore, at the request of the employer, the employee is obliged to return to work for seven consecutive days during the current month at the request of the employer.

The act proposal equates those who are absent from work because of parental responsibilities or their inability to come to work (Article 137, point 6 of the ZDR-1) with the status of employees, who were ordered to temporary wait for work at home. Therefore, such employees will be entitled to a compensation of 80% of the basis (the compensation will be entirely borne by the Republic of Slovenia) and not 50%. The salary compensation cannot be lower than the minimum wage and not higher than the average wage in the Republic of Slovenia.

To receive reimbursement for the abovementioned contributions, an employer must estimate, that in the first half of the year 2020, revenue will decline by more than 20% over the same period in 2019 and in the second half of the year 2020 they will not achieve more than 20% revenue growth over the same period in 2019. If this condition is not met when submitting the Annual Report for 2020, the employer will have to return the received national aid.

If employees are still working as normal in the time of epidemic, their employer is exempted from paying contributions for pensions and disability insurance (PIZ) in the months of April and May 2020. During this time, contributions for pension and disability insurance are paid by the Republic of Slovenia. The act proposal also regulates the obligation for employers to pay monthly crisis allowance in the amount of EUR 200.00 to their working employees, whose last paid monthly salary did not exceed three times the minimum wage.

For the duration of these measures, any compensation for sick leave will be covered by compulsory health insurance from the first day onwards, even if the remuneration should be (in accordance with other legislation) borne by the employer or the employee himself.

All those who will exercise the rights under this law may not share profit or pay part of their salaries for business performance or rewards to the management in 2020, otherwise they will be obliged to return the received aid together with default interests.

Tax measures

The act proposal provides for the exemption from payment in regard to instalments of preliminary prepayment of personal income tax from the performance of corporate activities and instalments of prepayments of tax from the income of legal persons for 2020, which are due during the legal validity of this act. Unpaid instalments are not considered accrued.

Measures to maintain the liquidity of companies

The act proposal obliges the Republic of Slovenia as a guarantor against banks and savings banks to fulfil part of the valid and overdue obligations of the borrowers.

On the day the law will enter into force, the enforcement of the decisions issued in proceedings pending under the Claim Enforcement and Security Act (ZIZ) and in tax enforcement proceedings pending under the Tax Procedure Act (ZdavP-2) will be suspended. The exemption from suspension of enforcement applies only in regard to executions arising from child support cases and cases connected with the compensation for lost child support due to the death of the person who was paying it.

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