New measures to preserve jobs in Croatia

Croatia

On its website on 23 October 2020, the Croatian Employment Service officially published both a new measure designed to preserve jobs jeopardised by the new coronavirus (COVID - 19) epidemic, "Job preservation subsidy - October-December 2020" as well as changes to the existing measure "Reduction of working hours".

The first measure unifies two previous measures: "September – December by sector" and "Micro-entrepreneurs, September – December". If an employer wants to use the new, unified measure, they must follow the prescribed procedure for giving up one of the previous two measures. It is not possible to accumulate the measures; the employer must decide which of the measures is more favourable.

Changes have been made to the second measure - "Reducing working hours" - with a view to providing an even greater financial subsidy to the employer and reducing the currently demanding administrative burden.

JOB PRESERVATION SUBSIDY, BY SECTOR

The new eligible sectors, in addition to those previously identified, are:

  • Agriculture, forestry, and fishing - only crop and livestock production, hunting and related service industries and fishing, and
  • Other service industries - repair of computers and personal and household goods and other personal service industries.

The subsidy can be requested for all employees taken on before 30 September 2020. The subsidy amount is determined by the decline in revenue. This must be a decline of at least 60% to qualify for the maximum subsidy of HRK 4,000.00 per employee.

The reference period for determining the revenue decline includes the second and third quarters of 2020 compared to the second and third quarters of 2019 (except for employers whose work is limited and who can prove a monthly decline in revenue).

In addition to the above, the subsidy also includes the contribution to pension insurance based on individual capitalized savings.

The employer is obliged to retain all employees – business-related dismissal is not permitted. If an individual employee’s employment contract is terminated for another reason, the employer is entitled to the subsidy payment for the days on which the employee worked until the employment contract was terminated.

Payment of funds follows, as before, on the last day of the month for the previous month, and at the latest upon submission of proof that the salary was paid - a VAT form or other legal document.

NEWS REGARDING SHORT-TERM SUPPORT

The subsidy is granted for temporarily introducing full-time work for employees lasting less than the monthly fund of hours, but not less than 70% of the monthly fund of hours, up to a maximum of HRK 2,800.00 per month net per employee (as opposed to the previous maximum of 50% of hours for and HRK 2,000.00 per month net per employee).

These payments are not affected if the employee received part of the salary compensation on some other basis (sick leave, annual leave), and part on the basis of the measure in question.

The employer may not:

  • instruct subsidized employees to work overtime;
  • employ people for positions that can be performed by subsidized employees;
  • use posted employees or the occasional work of pupils or students;
  • contract or order work from a separate place of work (remote work) for subsidized employees.

The employer is no longer obliged to submit weekly records of working hours for each employee to the Croatian Employment Service. The employer must submit records of working hours on a monthly basis, which may take the form of a collective document for all employees for whom subsidy is requested.