On 24 March 2020, the Government of the Republic of Slovenia presented its guidelines and measures for the preparation of a “Mega-Act” package worth around € 2 billion to help the population and the economy in mitigating the effects of the corona epidemic. The act has not been adopted yet; however, the measures are expected to stay in force from the date of the entry of the Mega-Act into force until 31 May 2020. The proposed measures are as follows.
I) Job retention measures
- New framework for co-financing of wage compensation for the temporarily laid-off employees (in Slovene: delavci na čakanju): All contributions of employees that are on a temporary lay-off, shall during that period be paid by the State to both funds (healthcare and pension fund) and to the State Budget, with rights of the policyholders and income of the funds maintained. Such measure relieves an employer immediately, without any procedure for claiming co-financing compensation. The State shall additionally co-finance 20 % net compensation for the employees. Entitlement to the co-financing after the end of the business year shall be established upon the income statement.
- Jobs that the State already directly subsidizes via special programs are co-financed in the amount of a difference between the full co-financing amount and an already existing subsidy.
- Compensation for all illness related absences from work (in Slovene: bolniška odsotnost) during the epidemic are set to be covered from the first day onwards by the ZZZS and not by the employer.
- Compensation system is set in place for the employees and those activated in the critical activities during the epidemic through an allowance for the dangerous work (in Slovene: dodatek za nevarno delo) and an allowance for the additional burden (in Slovene: dodatek za dodatne obremenitve) (healthcare, Civil protection, security, critical infrastructure etc.), after the decision of their superiors is made, in the range between 10 and 200 % of the supplement to basic wage.
II) Measures for the improvement of social status of people, especially those with low pensions, who on the basis of their age group are considered to be the most exposed to the dangers of the epidemic.
- Status of workers who do not work due to the force majeure (in Slovene: višja sila) (childcare, inability to come to work, Article 137(6) ZDR) is set to be the same as the status of the laid-off employees. This means that the former are also entitled to the wage compensation of 80% of the basic wage and no longer of 50%.
- Employees who lose their jobs during the epidemic are granted an automatic employment compensation from the first day onwards. When the validity of the first measure expires, their rights shall be determined on the basis of the existing legislation (compensation or social assistance (in Slovene: socialna pomoč)).
- Public services that are not performed during crisis shall not be paid by the households.
- Seniors are granted a solidarity allowance due to the consequences of virus SARS-CoV-2 (COVID-19). Three classes of rights are established:
|No.||Pension height EUR||No. of seniors||Payment height EUR||Financial resources together EUR|
|1.||Up to 500||104,714||300||31,414,200.00|
|3.||from 600 to 700||78,891||130||10,255,830.00|
III) Measures for extraordinary aid to the self-employed (in Slovene: samozaposleni)
Extraordinary measures are proposed for the self-employed who found themselves in a particularly difficult situation due to the crisis and (also) the nature of the work market, namely:
- Extraordinary aid shall be granted to all self-employed who proclaim that they were affected by the crisis in the form of a special statement via electronic application. The statement is publicly accessible. If it is later found that the statement contained any untrue information, the aid shall have to be returned.
- Self-employed who cannot perform their activity or can perform it in significantly reduced extent due to the crisis are entitled to a monthly base income in the amount of 70% of the minimum wage.
- The contributions of affected self-employed are written off during that period. Their contributions to the healthcare and pension fund are during that period paid by the State, with rights of the policyholders and income of the funds maintained. The amount of contributions for a crisis year is set on the basis of the reported profit after the year end.
- Payment of personal income tax advance (in Slovene: plačilo akontacije dohodnine) is postponed until the assessment of personal income tax (in Slovene: odmera dohodnine) for 2020.
IV) Measure to maintain business operations of companies
- All pension insurance contributions for the work of employees who work in the economy sector and who remain working in their workplace, will in the relevant period be covered by the state for both the employer and the employee.
- The rights of the insured are maintained.
- This measure reduces the cost of wages that have to be paid by the companies.
V) Measures to improve liquidity for businesses and to support research projects to combat the epidemic
- In order to resolve the liquidity issue, a guarantee scheme (the so-called »financial top«; in Slovene: »finančni top«) is established and the purchase of receivables from Slovenian companies is made possible. The state provides sufficient funds through a capital increase or a guarantee for the implementation of the guarantee scheme.
- Prepayment of corporate income tax and payment of income tax on the activity of self-employed (in Slovene: davek na dohodek iz dejavnosti za samostojne podjetnike) shall be “frozen” (temporarily suspended).
- The enforcement of contractual penalties in case of delays in the provision of supplies and services provided to the public sector, is frozen (temporarily suspended).
- Payment deadlines for payments to private suppliers from public funds are reduced to 8 days.
- Part of the unused funds from the European Social Fund (ESF) is channelled into helping companies and institutions involved in research and development (vaccines, medicines, protective equipment) to manage the effects of coronavirus.
VI) Reduction of attendance fees and salaries and exemption from payment for distribution services
- All attendance fees and other financial compensations received by the members of the supervisory boards in companies, which are directly or indirect majority state-owned, are reduced by 30%. The Slovenian Sovereign Holding (SSH) or The Bank Assets Management Company (BAMC) are responsible for achieving this measure in those companies, where they represent the state at general meetings.
- Reduction of salaries of all public office holders (in Slovene: javni funkcionar) by 30% for the duration of the SARS-COV-2 (COVID-19) epidemic. Judiciary is exempted from the law, while being called upon to waive 30% of its salary during the crisis.
- Exemption from the payment of the TV signal distribution service by the public RTV for regional and other televisions, which via DVB signal inform citizens of the Republic of Slovenia, for the period from the announcement until the abrogation of the epidemic.
VII) Public procurement measures
- The thresholds for the application of the Public Procurement Act (ZJN-3) are raised from 20.000 EUR for goods and services to 40.000 EUR and from 40.000 EUR for construction to 80.000 EUR.
- Municipalities or narrower parts of the municipalities are ordered to carry out public procurements independently.
VIII) Agricultural support
- Farmers suffering from COVID-19 are granted financial support in the amount of 80% of the full-time minimum wage for the duration of the disease, but no more than for the duration of the epidemic, due to their inability to work.
- Farmers and members of their holdings who are insured under the pension and disability insurance regulations may have their pension and disability insurance contributions reduced or written off. Written off contributions are considered paid.
- The possibility of deferring the payment of contributions (similar to the self-employed).
- Reduced payment of the levy on cadastral income by 50%.
- Compensation for the loss of income.
- Holders of fishing licenses for the year 2020 are entitled to compensation for the payment of berth occupancy charge in ports in the amount of 40% of the total refund.
- For aquatic organism growers, water reimbursement payments (in Slovene: plačilo vodnega povračila) will be reduced for 40% of the total value for year 2020.
Recommendation for employers in private sectors
- Employers in private sectors are advised to take similar approach as the public sector, which is presented in point I(4) – remuneration of employees in the range of 10% to 200% of the basic salary during an epidemic in health care, civil protection, security, critical infrastructure, basic consumer goods, etc.
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Our law firm is actively following the latest COVID-19 developments. As always, you can contact us via e-mail or telephone +386 (0)1 2445500, or you can directly contact the lawyer you are generally in contact with.
Law Firm Kavčič, Bračun & Partners, o.p., d.o.o
Ljubljana, 24 March 2020
All information contained herein is based on applicable law or obtained from publicly available data or other sources believed to be reliable. This document is for general information purposes only, may be subject to change and may not be used instead of a legal opinion/advice. KBP does not guarantee the accuracy of the information and shall not be liable for any damages or costs in connection with the use of, or reliance on, the information contained herein.