Situation:
An ABC SRL company provides all employees with a health care subscription that falls under the 400 euro/year/employee limi. Can the company also grant these subscriptions to employees on parental leave without suspending their allowance?
Solution:
According to Article 49 of the Labour Code, as amended and supplemented, the suspension of the individual employment contract may occur by right, by agreement of the parties or by unilateral act of one of the parties.
Suspension of the individual employment contract has the effect of suspending the employee’s work and the payment of salary rights by the employer.
During the suspension, the rights and obligations of the parties may continue to exist other than those previously provided for, if they are provided for by special laws, by the applicable collective labour agreement, by individual labour contracts or by internal regulations.
According to Article 16 paragraph (2) of the EMERGENCY ORDINANCE 111/2010 on leave and monthly child-raising allowance, as amended and supplemented, the right to the allowances provided for in Article 2, paragraph (1), Article 5 and Article 9 paragraphs (4) and (5) shall be suspended from the day following that on which the beneficiary earns taxable income and the child has not reached the age of 2 years, respectively 3 years in the case of disabled children.
Therefore, child-raising allowance is suspended if the recipient earns taxable income.
Please note that paragraph (3) of Article 16 contains some exceptions. Thus, as an exception to the provisions of paragraph (2) letter (i), the payment of child-raising allowance is not suspended if the person entitled to it is in one or more of the following situations:
- ; receives various amounts under the law, the collective employment contract or the individual employment contract, granted during the period of parental leave, other than those resulting from the actual performance of an activity during the period of leave;
- b) receives allowances as a local or county councillor, regardless of their level;
- c) realizes, during a calendar year, income subject to tax, through the actual performance of an activity during the period of leave, whose net level does not exceed 5 times the minimum amount of the allowance established in Article 2 paragraph (2).
We mention that the health care allowance falls under point a) above because the employee does not receive it for an activity performed during the leave period.
Provided that the employment contract regulates the payment of the medical subscription even during the period of suspension of the individual employment contract for parental leave, the payment of the parental allowance will not be suspended.
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), as amended and supplemented;
– Methodological Norms for the application of the Tax Code (approved by Government Decision no.1/2016).
– Labour Code of 2003 (Law No. 53 of 24 January 2003) – republished, with subsequent amendments and additions;
– EMERGENCY ORDINANCE 111/2010 on leave and monthly child-raising allowance.