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HOW IS THE TECHNICAL UNEMPLOYMENT FINALLY APPLIED?

On Monday evening, after long waiting, the Emergency Ordinance on the modification and completion of the OUG No. 30/2020 was published in the Official Journal, which refers to the protection that the State will guarantee to the employees during the state of emergency, in the event of suspension of individual employment contracts, at the initiative of the employer, in accordance with Article 52 (1) (c) of Law 53/2003 - Labour Code. Shortly, we are talking about the ordered regulation governing the technical unemployment during the SAR-cov-2 crisis.

As we intended, but did not hope, the ordinance was in support of all employees affected by the spread of SAR-virus cov-2, eliminating the differentiation between employees whose employers have been forced to close down completely or partially on the basis of the decisions taken by the public authorities and those who have been indirectly affected by the measures taken.

An important provision of the decree is the fact that it has been removed the condition that the employers must have a revenue reduction with 25% compared to the average of January - February 2020 and are in financial inability to pay all employees.

Therefore, in the light of the new provisions:

  • Benefit from technical unemployment all employees of employers who temporarily reduce or interrupt work wholly or partially due to the effects of SAR-cov-2 coronavirus disease during the decreed state of emergency, on the basis of a self-declaration by the employer.

  • the amount of benefits which workers will receive for the period during which they will be technically unemployed has remained unchanged and is fixed at 75 % of the basic salary corresponding to their employment, but not more than 75% of the average gross earnings under the State Social Security Act 2020.

  • The decree introduces a new point according to which the employer can supplement the income of workers, if the budget for the part of the staff allows it, with a difference of at least 75% of the basic salary corresponding to the work employed. This article may be applied to employees whose remuneration exceeds the average gross wage established by the law 6/2020 on social security in the State established for 2020.

What is encouraging for employers is that the State will pay them all in the event of technical unemployment and not only 75% of employees, as laid down in the previous regulation.

The decree comes with a number of additions regarding the situation of those who have more individual employment contracts. In this respect, it should be noted that:

  • persons who have at least one full-time employment contract during the emergency period will not be eligible for technical unemployment benefit.

  • if an employee has several individual employment contracts and all are suspended due to the state of emergency, he is entitled to the technical unemployment allowance related to the employment contract with the most advantageous wage rights.

Under this decree, employers will pay to the workers the allowance corresponding to the period of technical unemployment from the amounts they will receive from AJOFM.

For the purpose of granting the amounts necessary for the payment of benefits, paragraph 1 provides that the employer must submit by e-mail to AJOFM:

  • application signed and dated by the legal representative accompanied by
  • a self-declaration and
  • list of persons eligible for this allowance.

How will the procedure be applied?

  • Employers will submit these documents by e-mail to AJOFM;
  • employers will receive payment of the benefits in their bank accounts opened with commercial banks within 15 days from the date of submission of the documents;
  • employers have a maximum of three working days to make the payment to the employees.

The provision is intended to help employers who no longer have the liquidity, because they no longer have to make payments of allowances to employees from their own resources and thus receive sums from the unemployment insurance budget.

But what will happen in practice?

Things are not always as simple in practice as in legislation. So now we already know that, most companies pais their employees' salaries in the 10th of the month. However, the application of the new provision may result in late payment of salaries to employees.

Therefore, in the unlikely situation that the employer can finalise the salary calculation on the first day of the month and is able to submit the documents to AJOFM, will receive the money in the account on the 16th of the month and will be able to pay compensation to employees by the 19th of the month. This will result in a delay in payment of salaries of at least 10 days (in fact the duration will be much longer).

As regards the payment of taxes and contributions relating to technical unemployment benefits, the situation remains unchanged.

The calculation, maintenance and payment of income tax, state social contributions and health insurance contributions shall be made by the employer on benefits collected from the unemployment insurance budget.

No labour contribution shall be paid for this allowance.

 

 

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