Government support for business and workers in Slovenia

On 11 April 2020, the Intervention Measures to Mitigate the Effects of the COVID-19 Infectious Disease Epidemic on Citizens and the Economy Act (Zakon o interventnih ukrepih za zajezitev epidemije COVID-19 in omilitev njenih posledic za državljane in gospodarstvo, the "Act"), in response to the COVID-19 epidemic entered into force.

Temporary measures proceeding from the Act apply in the period from 13 March 2020 until 31 May 2020, unless otherwise provided by the Act. If the epidemic status is not terminated by 15 May 2020, the deadlines set for 31 May 2020 will be extended by 30 days.

Benefits applicable to the employers in accordance with the Act are:

1. Reimbursement of salary compensation for temporarily laid-off employees and employees absent from work due to force majeure - the state reimburses the employer the amount of the paid salary compensation to an employee, but only up to the amount of an average salary for 2019 in the Republic of Slovenia (EUR 1,753.84 gross) calculated on a monthly basis and reduced by the amount of employee’s contributions;
2. Exemption from contribution payments for temporarily laid-off employees and employees absent from work due to force majeure - the state reimburses only the contribution from the salary base of an average salary in 2019 in the Republic of Slovenia, calculated on a monthly basis and not from the excess part of actual employee’s salary;
3. Partial exemption from contribution for pension and disability insurance for employees working during the COVID-19 epidemic in the private sector - fully paid by the Republic of Slovenia;
4. Obligation to pay a monthly crisis allowance of EUR 200, which is exempt from all taxes and contributions to each employee working and whose last paid monthly salary did not exceed triple the minimum wage (3 x 940.58 EUR gross) and
5. Compensation during the temporary lay-off as a result of illness or injury is covered by the compulsory health insurance fund from the first day onwards, even though the employer would have to cover it according to the applicable laws.

It depends on the measure.

For measures (i) and (ii) any employer in the Republic of Slovenia is eligible, except:

• a direct or indirect user of the budget of the Republic of Slovenia, or budget of the municipality, whose share of revenues from public sources in 2019 was higher than 70% and
• an employer in financial or insurance business belonging to Group K according to the standard classification of activities.

An employer is entitled to payment under these measures, if it estimates that its revenue in the first half of year 2020 will be lower for more than 20% compared to the same period in year 2019 and that in the second half of year 2020 its revenue growth will not surpass 50% revenue growth compared to the same period in year 2019.

If these conditions are not met when submitting annual reports for the year 2020, the beneficiary will have to return all financial aid received in the scope of these measures.

If an employer has not been in business whole year in 2019, it is entitled to these measures if it suffered the following loss:

• at least a 25% decrease in revenue in March 2020 compared to revenue in February 2020 or
• at least a 50% decrease in revenue in April or May 2020 compared to revenue in February 2020.

The employer is not eligible for these measures, if:

• it did not pay the mandatory contributions and other non-tax liabilities according to the law governing financial administration and which are collected by the tax authority or if it has defaulted obligations due on the date of submission. The employer is deemed to be non-compliant if it has not submitted the calculation of tax deductions for employment income for the period of the last five years before the date of submission and
• if a bankruptcy proceeding is initiated against it.

For measures (iii) and (iv) all employers in the private sector are eligible, save employers in financial and insurance business belonging to group K following the standard classification of activities. Direct and indirect users of the budget of the Republic of Slovenia or municipal budgets are not eligible for these measures.

In case of measure (v) the beneficiaries are persons who are insured under Article 28 of the Health Care and Health Insurance Act and have the right to compensation during the temporary lay-off as a result of illness or injury on the day of this Act entering into force or become entitled to this right after the Act enters into force. Direct and indirect users of the budget of Republic of Slovenia cannot claim a reimbursement on this basis.

To apply for measures (i) and (ii) an employer must file an application electronically to the Employment Service of Slovenia within eight days of the referral to a temporary lay-off, but in any case by 31 May 2020 at the latest. If an employer temporarily laid-off employees before the Act entered into force, for the period from 13 March 2020, it must apply within eight days of the Act entering into force.

For measures (iii) and (iv), filing of an application is not envisaged and employers simply report the exemption of contributions with the monthly declaration of paid salaries (REK-1 form).

In case of measure (v) the beneficiaries are persons who are insured under Article 28 of the Health Care and Health Insurance Act and have the right to compensation during the temporary lay-off as a result of illness or injury on the day of this Act entering into force or become entitled to this right after the Act enters into force. Direct and indirect users of the budget of Republic of Slovenia cannot claim a reimbursement on this basis. This measure applies from 11th April 2020 until the termination of the legal grounds for receiving the compulsory insurance compensation or until the Government declares that the Act does not apply anymore, in any case until 31 May 2020 at the latest.

In relation to measures (i) and (ii):

• The employer is obliged to pay the net salary compensation to the employees while receiving the reimbursement of salary compensation pursuant to provisions of the Act;
• The employers must notify the Employment Agency of Slovenia (ZRSZ) before calling the laid-off employees back to work;
• During the period of receiving the reimbursement, an employer is not allowed to order overtime work if it is possible to carry out such work with temporarily laid-off employees;
• If an employer violates any of the above provisions, it will need to return triple the received amount;
• If the employer initiates a wind-down procedure pursuant to the Companies Act while receiving the fund based on this Act or in the period after, that is equal to the period of receiving the funds, the employer must return the received funds in total and
• During the temporary lay-off the employer cannot request the employee come to work for longer than seven consecutive days during the current month. Also, in this case, the employer must inform the Employment Service of Slovenia about this in advance.

In relation to measures (i), (ii) and (iii), the employers must repay all funds received based on this Act, with statutory default interest, if the profits have been shared or the business performance bonus/awards have been paid to the management of the company in year 2020. In practice there have been different opinions about whether the prohibition of payment of business performance bonus refers solely to the management or also to other employees due to unclear wording of the Act. In our view the provision applies solely to the payment of a business performance bonus to the management. Please note that any payments that were made prior to the Act entering into force are allowed and do not trigger the repayment of received funds.

An employer who has unduly benefited based on this Act and subsequently realizes, must inform FURS and repay the received funds based on a declaratory decision within 30 days.

No, the temporary schemes do not contain any specific provisions in order to protect the employees from being dismissed. An employer may terminate an employment agreement in accordance with the Employment.