Czech Republic: Update on employment government support measures 1 April

Governments across CEE have introduced or are discussing various measures to mitigate adverse consequences of the corona virus situation on employers and employment relationships. This short overview summarises measures taken in the region with respect to employment matters. Due to the dynamic developments, we will update this overview regularly and as required.

Reimbursements offered by the government: On 30 March 2020 the Czech Ministry of Labour and Social Affairs introduced the following reimbursements that are newly divided into two regimes "A" and "B" – these include and supplement in their entirety the five originally communicated regimes in the preceding week. The government hopes to thereby simplify the whole administrative process. This reimbursements were announced by the Czech government on 1 April.

Regime "A"

• Includes employees in mandatory quarantine entitled to 60% of their average earnings; and
• Employees of employers who were ordered to close their business premises due to mandatory restrictions, such employees are entitled to 100% of their average earnings.

In both scenarios the employer can request a reimbursement of 80% of such costs from the state in the maximum amount of CZK 39,000 (approx. EUR 1,425) per month per employee.

Regime "B"

Includes so called obstacles to work on the employer´s side in accordance with sections 207, 208 and 209 of the Czech Labour Code. Such obstacles are:

• employees unable to work due to business operations disruption caused by mandatory quarantine affecting at least 30% of employees and the remaining 70% of employees are unable to continue the work, in which case the remaining employees are entitled to 100% of their average earnings;
• if the production of an employer is disrupted or reduced due to a lack of supplies, the employees are entitled to 80% of their average earnings; or
• if employees are not fully utilized due to a temporary decrease of employer´s sales or demand for employer´s services/goods, the employer may under certain circumstances reduce the salary by up to 40% (so-called “partial unemployment”: an agreement has to be reached with trade unions; where no trade unions are established, the employer may introduce such decrease by internal regulation which can however be challenged by the employee and is subject to judicial review by competent courts).

In the cases mentioned above under the regime "B" the employer can request a reimbursement of 60% of labour costs from the state in the maximum amount of CZK 29,000 (approx. EUR 1,060) per month per employee.

Wage reimbursements will be granted to employers for each employee only if the employee is still in an employment relationship with the employer, no notice of termination has been given by the employer and such employee has not been given a termination notice with the exception of sections 52 (g) and (h) of the Czech Labour Code. All reimbursements will be provided only for already paid statutory wage compensation, including the properly paid amount for health and pension insurance.

The program will be implemented by the locally competent Labour Office of the Czech Republic. As mentioned above, the program starts on 1 April 2020. On or about April 6, the Ministry of Labour and Social Affairs (and the competent Labour Office) will issue an online submission form on its website, and on April 10, the first reimbursements are expected to be paid out. Such reimbursements will be paid for the period between March 12 and the end of April, but there is a possibility of prolongation according to current developments concerning the coronavirus crisis.

Other: The government is also preparing a further Regime "C" to be presented on or about 6 April 2020.