Government measures to support employers, in force as of June 1 2020

According to the Communiqué of the Ministry of Labor, the measures adopted by the Government through Emergency Ordinance 92 aim to support employers with a view to consolidating the labor market, while preventing the increase of the national unemployment rate and ensuring a source of income for employees, thus helping to reduce the negative social effects caused by the spread of COVID-19. 

Thus, pursuant to GEO 92 published in the Official Gazette no. 459 of 29.05.2020, three types of support measures for employers are established, starting on June 1st, 2020:

(i) MEASURE 1:

(1) employers whose employees had their agreements suspended pursuant to art. 52 para. 1 letter c and did not benefit from technical unemployment according to GEO 30/2020 during the state of emergency / alert, and

(2) employers whose employees were subject to technical unemployment according to GEO 30/2020, during the state of emergency / alert,

shall benefit, for a period of 3 months, from the settlement of a part of their salary, representing 41.5% of the gross basic salary corresponding to the position held, but not more than 41.5% of the average gross salary for 2020 (maximum amount settled 2,253 lei).

• Conditions

Measure 1 shall apply to employees who have had their employment agreements suspended for at least 15 days during the state of emergency or alert.

For Measure 1, employers are required to maintain employment until 31.12.2020, except for seasonal workers and for departure for reasons not attributable to the employer (e.g.  resignation).

The amounts are not given for employers benefiting by the subsidies granted in the case of employers have concluded contracts or conventions with the local employment agencies, or the employment agency of Bucharest, on grounds of art. 80, 85 and 934 of Law no. 76/2002 (namely: employers of graduates of educational institutions, young people at risk of social marginalization, unemployed over 45 years of age, unemployed who are single parents supporting single-parent families, long-term unemployed, young people aged between 16 and 25, who do not have a job, do not attend a form of education and do not participate in vocational training activities).

• Settlement procedure

Employers bear from their own funds the salaries of employees who benefit from the provisions of this ordinance, and shall request repayment of the amounts from the local employment agency during the period from 1st  to the 25th of the following month (an affidavit and a list of employees are sent to the local employment agency) for the employees qualifying for the subsidies.

The local employment agency shall settle the amounts within maximum 10 days from the date when the employer fulfills his declaratory and payment obligations of incomes from the period for which they make the request.

• Restrictions

If the employment is terminated before the stipulated period, employers are obliged to reimburse in full the amounts received for each person for whom the employment agreement ceased before 31.12.2020 to the National agencies for employment, plus interest by reference to National Bank of Romania applicable on the termination date of the employment, if the termination took place on the following terms: agreement of the parties, as a result of nullity, of admission of reinstatement of an employee and of dismissal due to elimination of the position held.

(ii) MEASURE 2

The settlement of the indemnities for technical unemployment provided for by GEO 30/2020 is extended from June 1st, 2020, for all areas of activity until restrictions instituted during the state of alert are lifted by the relevant authorities.

Employers, who have several objects of activity, at least one of which is restricted by the acts of competent authorities, may apply for Measure 1 or for the settlement of technical unemployment indemnities (Measure 2).

However, note that technical unemployment shall be applicable only for employees who perform in the suspended field of activity.

(iii) MEASURE 3: Employment of young people/ elderly people 

(A) Starting on June 1st 2020, employers who are hiring for an indefinite period and on a full-time basis, from June 1st 2020 – 31st December 2020, persons over the age of 50 whose employment has ceased for reasons not attributable to them (e.g. dismissal), during the state of emergency or alert, who are registered as unemployed in the records of the county employment agencies, respectively of the employment agencies of Bucharest, shall receive monthly, for a period of 12 months, , 50% of the employee's salary,  for each person employed in this category, but not more than 2,500 RON/month.

(B) Employers who are hiring, not later than 31st December 2020, for an indefinite period and on a full-time basis, persons aged between 16 and 29 who are registered as unemployed in the records of the county employment agencies, respectively of the employment agencies of Bucharest, shall receive, for a period of 12 months, 50% of the employee’s salary, for each person employed in this category, but not more than 2,500 RON/month.

• Conditions:

Employers have the obligation to maintain the employment relationship for a further period of 12 months from the end of the 12-month period for which support is granted.

The amounts related to Measure 3 are granted for the payment of the salary proportional to the actual worked time by the employee and are not entitled, for the same employee, if there are subsidies granted to employers who have executed contracts or conventions with the local employment agencies, or the employment agency of Bucharest, pursuant to art. 80, 85 and 934 of Law no. 76/2002 (namely: employers of graduates of educational institutions, young people at risk of social marginalization, the unemployed over the age of 45, the unemployed who are single parents of single-parent families, the long-term unemployed, young people aged 16 to at the age of 25, who do not have a job, do not attend a form of education and do not participate in vocational training activities)

• Procedure:

The amounts are granted from the unemployment insurance budget, at the request of the employers, submitted, by electronic means, to the local employment agency, within the area of their headquarters. The grants procedure is to be established by order of the President of the National Agency for Employment, until June 2.

• Restrictions

If the employment is terminated before the stipulated period, employers are obliged to reimburse in full the amounts received for each for whom the employment agreement ceased before 31.12.2020 to the National agencies for employment, plus interest by reference to National Bank of Romania applicable on the termination date of the employment, if the termination took place on the following terms: agreement of the parties, as a result of nullity, of admission of reinstatement of an employee and of dismissal due to elimination of the position held.

(iv) OTHER MEASURES:

• GEO 92 provides that an Order of the Labor Minister will be published and this order will contain the measures to be applied during the state of alert to prevent and combat the effects of the COVID-19 pandemic, for the further application of GEO 30/2020 for all areas in which restrictions are maintained, until these restrictions are lifted.
• Amendments to the law on the Social House of Builders (in Romanian: “Casa Sociala a Constructorilor”).

The Social House of Builders (SHB) is a non-profit, autonomous organization, with legal personality and its own patrimony, headquartered in Bucharest, whose members include employers' associations in the field of construction and production of construction materials.

The law governing the SHB stipulates that employees with an  employment contract in construction and production of construction materials benefit during the interruption of the activity from an indemnity representing a taxable monthly amount, equal to 75% of the average for the last 3 months of their basic gross salary.

GEO 92/2020 amended the provisions regarding the SHB and extended the period for granting the legal social protection indemnity during the application of the measures ordered both during the state of emergency and during the state of alert.

Thus, the companies in the construction industry that are members of SHB, can request from SHB the payment of the indemnity for the employees who have interrupted their activity in the context of the COVID-19 epidemic, including during the state of alert.

For more details, please contact:

Andrei Albulescu 

Partner, Head of Employment

Phone: +40 21 796 52 61

E-mail: AAlbulescu@saa.ro

or

Anca Ulea 

Managing Associate

Phone: +40 21 316 87 49

E-mail: AUlea@saa.ro