BUSINESS BUSINESS COMPANIES ECONOMY LEGAL OUTLOOK

Gruia Dufaut Law Office : Labor Law- New measures to support employers and employees

Part of the support package for companies whose activity has been impaired by the Covid-19 pandemic, the State has adopted under the GEO no. 70/2020 and the GEO no. 92/2020 certain measures aimed to encourage employers to maintain work places and continue, at the same time, to hire certain categories of people.

The main three measures are :

 

  1. Maintaining the job retention scheme granted by the State

 

The furlough indemnity paid up the State (known as technical unemployment indemnity) set at 75% of the salary received by the employee, without thus exceeding 75% of the national average salary (Lei 4,072) is maintained after May 31, 2020 but only for the employers and employees acting in the fields impaired by the restrictions adopted by the authorities to fight against the Covid-19 pandemic (as for example restaurants that couldn’t entirely open, etc.)

 

  1. Partial payment of salaries by the State

 

Starting with June 1, 2020, the State reimburses to employers, upon request, a part of the monthly salary paid up to employees having resumed work after being furloughed. The amount granted by the State amounts to 41,5% of the average gross salary paid up to the employee thus without exceeding 41,5% of the national average salary (max. Lei 2,253).

 

Eligibility criteria for employers to benefit from the job retention scheme granted by the State

 

  • The employee in question has been furloughed for at least 15 days during the state of emergency or during the state of alert ;
  • The employer is bound not to terminate the employment agreement of such employee before December 31, 2020. This condition does not apply to seasonal workers or if the employment agreement is terminated for reasons that the employer can not be held accountable for ;
  • The amount corresponding to 41,5% of the salary paid up by the employer, thus without exceeding 41,5% of the national average salary is paid up by the employer who shall apply for reimbursement thereof to the territorial work agencies. It is to be noted that the State undertakes payment only of the net amounts paid by the employer to the employee ;

 

  1. Bonuses for employers hiring certain categories of people

 

The State shall grant a 12-month bonus set to 50% of the monthly salary of the employee (the normative act makes no mention on whether gross or net salary) but without exceeding LEI 2,500 / month to employers who hire until December 31, 2020 the following categories of persons :

 

  • People over 50 years old ;
  • People from 16 to 29 years old ;
  • Romanian citizens who returned in the country subsequently to losing an employment contract abroad due to the crisis caused by the Covid-19 pandemic, free from any other specific conditions or limitations ;

 

Eligibility criteria to be met by the employer in order to benefit from such bonuses paid up by the State :

 

  • Conclude a permanent employment agreement with the said people ;
  • Retain the said positions for at least 12 months after the 12-month bonus period.

 

Sanctions

 

Should the employer have the initiative of terminating the agreement concluded with one of the people belonging to the said categories before the 12-month term following the period for which the bonus was paid by the State, than they shall be bound to integrally reimburse the amounts granted by the State for each employee whose employment agreement has been terminated before the limit date ; such amounts shall be determined by taking into account the reference interest rate of the National Bank of Romania, in force at the date of termination of the employment agreement.

Finally, keep in mind that such bonuses can not be granted either to the employees of the public institutions and authorities or to employers who, at the date of filing of the application for payment are under bankruptcy, dissolution or who have suspended their activity for reasons other than those related to difficulties caused by the Covid-19 pandemic.

 

GRUIA DUFAUT LAW OFFICE

Attorneys at law (Paris & Bucharest)

www.gruiadufaut.com

 

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