Technical unemployment amid the war in Ukraine

According to a draft OUG initiated by the Ministry of Labour and Social Solidarity (MMSS), companies facing financial difficulties as a result of the war in Ukraine will be able to settle technical unemployment from the state if they use it for their employees.

http://www.mmuncii.ro/j33/images/Documente/MMSS/Transparenta_decizionala/OUG_somaj_tehnic_Ucraina_Fed_Rusa_Belarus_23032022.pdf

The document provides for an allowance of up to 75% of the basic salary of the job occupied by each employee with a suspended employment contract, up to 75% of the average gross salary in 2022, i.e. 4,571 lei.

The conditions of granting are similar to those applied for the settlement of technical unemployment due to the pandemic situation.

According to the proposed legislation, this allowance will be granted until 31 December 2022, during the period of temporary suspension of the individual employment contract, at the employer’s initiative.

Companies that will be able to claim this settlement are those that experience a decrease in revenue of at least 20% compared to January 2022 revenue or compared to revenue in the same month in 2021 and:

  • are directly or indirectly affected by the impossibility of carrying out transactions with economic operators in Ukraine, Russia and Belarus;
  • are subject to international sanctions and have restrictive measures in place in relation to actions that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine or have their funds or economic resources blocked by an order issued by the President of ANAF in the context of such sanctions.

We mention that the allowance is granted in proportion to the number of days during which the activity was temporarily interrupted or reduced.

As in the case of technical unemployment settlement during the coronavirus, employers will be the ones who, after receiving the sums from the state, will be in charge of paying income tax, health and pension contributions. For these allowances, the labour insurance contribution (CAM) will not be payable.

In addition, if the employer has funds, the allowance may be additional to the amount received from the state.

As long as they are on paid technical unemployment, employees will be insured under the public health system, and the period spent in this way will be considered as a qualifying period for unemployment benefit, as well as the period on which parental leave and the related allowance can be granted.

According to the draft OUG, the documents required to apply for this state aid will be:

–              application signed and dated by the legal representative;

–              a declaration on their own responsibility stating that they fall within the situations provided for by the draft OUG;

–              income and expenditure statement for the month for which the allowance is requested;

–              a copy of the order to freeze funds or economic resources in the field of international sanctions, issued by ANAF, if applicable;

–              the list of persons who are to benefit from this allowance, assumed by the legal representative of the employer.

The model application, the affidavit and the list of persons will be formalized by an order of the MMSS within 10 working days after the draft comes into force.

It is important to mention that this state aid can also be claimed by companies applying the Kurzarbeit mechanism, while institutions, public authorities and employers who are, at the time of application, in bankruptcy, dissolution, liquidation or whose activities have been suspended/restricted for other reasons will not be able to claim this type of technical unemployment.