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Amendment regarding the compensations for Employers

compensation for employers

AMENDMENT REGARDING THE COMPENSATIONS FOR EMPLOYERS 
 
On 21 April 2020 in the State Gazette was published Decree No. 71 of 16 April 2020 amending and supplementing the Decree No. 55 dated 30 March 2020 of the Council of Ministers laying down the conditions and procedure for payment of compensations to employers in order to preserve the employment of employees in state of emergency, announced by decision of the National Assembly of 13 March 2020 (the “Decree”).
The amendment of the Decree clarifies some issues that have arisen from its initial version and its application. The amendments shall apply also to employers who have already applied for compensations.
Below we present information about the changes in the Decree.

I. Amount of compensation paid by the State
In response to the public reaction, the amount of compensation has been increased, and will now cover 60% (sixty percent) of the social security contributions paid by the employer. The amount of social security contributions will again be determined on the basis of January 2020.
Regarding employers, they are still obliged to pay the full amount of the employees' remuneration and the due social security contributions for the respective month. In the case of introduction of part-time work, the employer must pay the full amount of the employment remuneration, defined as per full-time work, and the due social security contributions for the respective month.

II. Scope of support
The Decree expands the categories of employers who are directly affected by the state of emergency. Namely, in the Schedule to the Decree, the categories of Driver's Training and Daily Child Care (Private Sector) were added. When applying for compensation, employers who are listed in the Schedule, are not required to demonstrate a decrease in their sales revenue.
However, the scope of the Decree explicitly excludes employees who are using unpaid leave, i.e. no compensation will be paid to employers for such employees.

III. Obligation of employers to retain employment
The amendments of the Decree explicitly state that employers are obliged to retain employment of those employees, for whom compensations were received, for an additional period equal to the period for which employers were paid compensations.
In the section “Questions and Answers regarding payment of employers’ compensation in order to retain employment of employees during a state of emergency”, the Ministry of Labor and Social Policy states that the obligation not to dismiss employees (on the grounds of closure of part of the enterprise or staff reduction; reduction of the volume of work; suspension of work for more than 15 days ) is not limited to only to employees for whom compensation are paid, but should apply to all employees of the employer.

  IV. Payment of compensations by the National Social Security Institute (NSSI)
According to the Decree NSSI shall pay the due compensations to employers monthly, based on the summarized information provided by the Employment Agency.

For further information on state compensation eligibility and legal assistance for application, please do not hesitate to contact Colliers International Legal Department at: bulgaria@colliers.com or +359 896 777 654.

 

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