COVID – 19: Labour law and payroll taxes (PIT, ZUS, PPK)

Labour law

1. Prolongation of the payment of care allowance in connection with the closing of educational institutions

In addition to the applicable law, it is planned to continue financing childcare allowance for the parents of children under the age of 8 due to the interruption of the functioning of educational institutions. It has already been announced that schools and other educational institutions will be closed until Easter. The circle of persons entitled to this benefit was also expanded, e.g. by people who take care of disabled persons or parents of children under 3 years of age if they employ a nanny and this one because of COVID-19 will not be able to look after the child. According to the assumptions, the length of additional care allowance is to be decided by the Council of Ministers in the Regulation.

Legal basis: art. 4 of the COVID-19 Act

2. Co-financing the remuneration of employees affected by economic downtime

The employer pays the employee covered by economic downtime a salary reduced by no more than 50%, but not lower than in the amount of the minimum remuneration for work (taking into consideration working time). Such remuneration will be co-financed from the Guaranteed Employee Benefits Fund (‘GEBF’), up to 50% of the minimum remuneration for work. GEBF also finances social security contributions due on the amount of co-financed remuneration (maximum subsidy amount is PLN 1533,09). The subsidies will be paid for 3 months. The conditions and procedure for performing work during periods of economic downtime are determined in consultation with trade unions or employee representatives selected in the manner adopted by that employer.

To get the above support, the company must meet one of the following criteria: a) a decrease in turnover of at least 15% in the two months after January 1, 2020 compared to the same 2 months last year, or b) A decrease in turnover of at least 25% in the month after January 1, 2020 compared to the previous month.

Support shall not apply to the remuneration of employees whose remuneration obtained in the month preceding the month in which the application was submitted was higher than 300% of the average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office (PLN 16,103.71).

During the period of receiving the support and within 3 months after the end of receiving the benefit, it will not be possible to dismiss the employees covered by this aid.

Legal basis: 15g of the COVID-19 Act.

3. Co-financing the remuneration of employees covered by reduced working time in the event of a decrease in economic turnover

An entrepreneur who suffers a decrease in economic turnover due to COVID-19 may limit the working time of employees by 20%, not less than 0.5 full-time job, the remuneration for this period may not be lower than the minimum remuneration for work . The GEBF will subsidize remuneration at that time to the amount of half of the remuneration after reducing the working time referred to above, however not more than 40% of the average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office and security contributions due on the amount of co-financed remuneration (currently the maximum grant amount will be PLN 2452.27). The subsidy will be paid for a period of 3 months. The conditions and procedure for performing work during the reduced working time shall be determined in consultation with employee representatives selected in the manner adopted by that employer.

During the period of receiving the support and within 3 months after the end of receiving the benefit, it will not be possible to dismiss the employees covered by this aid.

Legal basis: 15g of the COVID-19 Act

4. Greater flexibility in terms of working time

In the event of a decline in economic turnover (within the meaning of point 3 above), the employer is entitled to introduce the following additional solutions: a) limitation of uninterrupted daily rest to 8 hours a day and 32 hours a week (usually 11 hours a day and 35 hours a week); b) the introduction of a balanced working time system (extension of working time to 12 hours, extended working time is balanced by shorter daily working hours on specific days or by rest days; reference period up to 12 months); c) concluding an agreement with employees on applying less favorable working conditions than those resulting from employment contracts.

This apply this solution an agreement between the employer and trade unions / employee representatives is needed under the same rules as in point 2 and 3 above.

Legal basis: 15zf of the COVID-19 Act

5. Extension of existing medical certificates for employees

During the epidemic, the validity of existing medical certificates is extended. The employer will be required to conduct initial and periodic examinations within 60 days after cancellation of the epidemic status.

Preliminary examination is compulsory but the certificate will can be issued by a doctor other than an occupational medicine doctor.

Legal basis: art. 12a the COVID-19 Act

6. Subsidy for jobs paid by local government (starosta) for small / medium enterprises

The local county authority (starosta) may, on the basis of the concluded contract, grant the entrepreneur co-financing of part of the employee remuneration costs and social security contributions due on these remuneration in the event of a decrease in economic turnover following the occurrence of COVID-19.

The decrease in economic turnover is understood as a decrease in the sale of goods or services in quantitative or value terms calculated as the ratio of total turnover within any of the following 2 subsequent calendar months falling in the period after 1 January 2020 to the day preceding the day of submitting the grant application, compared to the total turnover from the corresponding 2 consecutive calendar months of the previous year; a month is also considered to be 30 consecutive calendar days in a row, if the two-month comparative period begins during a calendar month, that is on a day other than the first day of a given calendar month.

The amounts of funding depend on the decline in turnover and will be as follows:

a decrease in turnover of at least 30% – funding not exceeding the amount of 50% of the salaries of individual employees covered by the application for co-financing, together with social security contributions due on those salaries, but not more than 50% of the minimum remuneration for work increased by social security contributions from the employer for each employee;
a decrease in turnover of at least 50% – co-financing in an amount not exceeding the sum of 70% of the salaries of individual employees covered by the application for co-financing together with social security contributions due on these remuneration, but not more than 70% of the minimum remuneration amount, increased by contributions on social security from the employer, for each employee;
a decrease in turnover by at least 80% – co-financing in an amount not exceeding the sum of 90% of the salaries of individual employees covered by the application for co-financing, together with social security contributions due on these remuneration, but not more than 90% of the minimum remuneration amount, increased by contributions on social security from the employer, for each employee.

The entrepreneur submits an application for co-financing to the local labour office competent for its registered office or place of work by employees within 14 days from the date of announcing the recruitment by the director of the local labour office. The entrepreneur is obliged to keep the employees covered by this in employment, for the period of co-financing and, after the end of co-financing, for a period equal to this period. If this condition is not met, the grant amount will be refunded. Co-financing is granted for a period not longer than 3 months.

Legal basis: art. 15zzb of the COVID-19 Act

7. Downtime allowance for contractors and self-employed

One-off downtime allowance of 80% of the minimum wage for:

conducting non-agricultural business, who started the activity prior to 1. February 2020,
persons performing the agency contract, mandate contract, other service contract to which the provisions on the order or a specific task contract apply,
if he/she is not subject to the social security insurance from other title.

The downtime benefit is due when, as a result of COVID-19, there has been a stoppage in conducting business activity, respectively by a person conducting non-agricultural business activity or by the principal or contracting party with whom a civil law contract has been concluded.

The benefit is paid if the income from non-agricultural business activity within the meaning of the provisions on personal income tax obtained in the month preceding the month of submitting the application for parking benefit was at least 15% lower than the income obtained in the month preceding this month and was not higher than 300 % of the average monthly salary from the previous quarter announced by the President of the Central Statistical Office (PLN 16,103.71).

In the case of a mandate contract, the benefit is paid if:

the contract was concluded before 1. February 2020,
the remuneration under this contract was not less than 50% of the minimum remuneration (if the remuneration was lower than the minimum remuneration, parking is payable in the amount of the sum of remuneration under the concluded contract.
the remuneration from the contract obtained in the month preceding the month of submitting the application was not higher than 300% of the average monthly salary from the previous quarter announced by the President of the Central Statistical Office (PLN 16,103.71).

The benefit is paid on application.

Legal basis: art. 15zq and following of the COVID-19 Act

8. Work permits

If the last day of the validity of the work permit falls during the period of epidemic emergency or epidemic status announced in connection with SARS-CoV-2 virus infections, the period of validity of this work permit is extended by law until the end of the 30th day following the date of cancellation of this from the last states.

The provision of the first sentence shall apply accordingly to the decision to extend the work permit or extend the seasonal work permit. In the event of the extension of the period of validity of the work permit, the application for extension shall be submitted no earlier than 90 days before the end of the period of validity of the work permit specified in this permit and no later than on the last day of the period of validity of the extension based on the special act If the statement on entrusting the performance of work to a foreigner entered in the register of declarations indicates the period of work, which ends in the period of epidemic emergency or epidemic status, announced in connection with SARS-CoV-2 virus infections, the foreigner may perform work with a statement for the benefit of the entity who made the statement, in the period or periods not covered by the statement, by the end of the 30th day following the date of dismissal of the last state, which was in force, without a work permit.

Legal basis: art. 15zzq of the COVID-19 Act

Payroll taxes (PIT, ZUS, PPK)

1. Deferring the payment of PIT advances

The deadlines for payment of personal income tax advances collected in March and April 2020 will be postponed until June 1, 2020.

The regulation applies to entities who pay out revenues from the following sources:

employment contracts,
social security benefits paid by employers
mandate and specific task contracts carried out not within individual business activity,
copyright and related rights

Condition of postponement – the payer suffered “negative economic consequences due to COVID-19”. The COVID-19 Act does not define what the above term means.

Legal basis: art. 4 of the COVID-19 Act The amended provisions: art. 52o of the PIT Act

2. Higher amounts of selected tax-free benefits

Annual tax-free limits for selected benefits have been temporarily increased. It includes, inter alia:

the value of in-kind benefits and cash benefits financed from the company’s social benefits fund – in 2020 and in 2021 tax exempt up to PLN 2,000 (current limit – PLN 1,000),
subsidies to: leisure organized by entities conducting economic activity in this regard, for minor children, financed from sources other than the company’s social benefits fund – in 2020 and in 2021 tax exempt up to PLN 3,000 (current limit – PLN 2,000),
aid received in case of individual fortuitous event, natural disasters, chronic illness or death – in 2020 tax exempt up to PLN 10,000 (the current exemption limit – PLN 6,000).

Legal basis: art. 4 of the COVID-19 Act The amended provisions: art. 21 (1) of the PIT Act

3. Postponing of the deadline for 2019 annual PIT

PIT annual tax return for 2019 can be submitted until May 31, 2020 (instead of the statutory deadline – 30. April 2020) provided that the tax resulting from the tax return will be paid within this period. The new regulations, however, do not specify whether penalty interest for late tax payment will also be postponed if the tax is paid between 1. May – 31. May 2020. A separate regulations of the Minister of Finance is expected in this respect.

Legal basis: art. 15zzj of the COVID-19 Act

4. Deferral of social security contributions without prolongation fee

As for the contributions due for the period from 1 January 2020, postponing the payment or payments in installments, shall not be charged with prolongation fee. It refers to the applications submitted during the period of the state of emergency epidemic or the state of the epidemic or in the period of 30 days following cancellation of the above state.

Legal basis: art. 15zb of the COVID-19 Act

5. Exemption from social security contributions for self-employed and micro employers

Payment of ZUS contributions for a period of 1. March 2020 – 31. May 2020 is exempt for the following subjects:

persons conducting individual business activity before February 1, 2020, provided that income from such activity obtained in the month in which the application for exemption was submitted is not higher than 300% of the forecasted average monthly gross remuneration in the national economy in 2020 (currently it is PLN 15,671),
entity registered as payer of social security contributions before 1. February 2020, and employing on 29. February 2020 less than 10 insured persons.

Exemption is granted upon application. The application should be submitted until 30. June 2020. Exemption from the payment of contributions does not release from the obligation to submit declarations – declarations should be filled until 30. June 2020. Contributions subject to the exemption are financed from the state budget.

Legal basis: art. 31zo and subsequent COVID-19 Act

6. Postponement of the deadline for implementing Employee Capital Plan (PPK)

The new deadline will apply to the entities that employed at least 50 people on 30. June 2019. The employers will be obliged to enter into PPK management agreement by 27. October 2020 and to sign PPK administration agreement by 10. November 2020.

Legal basis: art. 54 COVID-19 Act Amended provisions: art. 134 (2) Act on PPK

7. Reporting to ZUS all specific task contracts from January 1st, 2021

As of 2021, the payer of social security contributions or natural person ordering work on the basis of specific task contract will be obliged to Social Security Institution (ZUS) about the conclusion of each specific task contract if such a contract is signed with a person other than employee.

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If you would be interested in implementation of solutions proposed as part of the anti-crisis shield, please contact Wiktoria Cieślikowska, wiktoria.cieslikowska@mddp.pl and Anna Misiak, anna.misiak@mddp.pl

In MDDP, we have also established a CORONAVIRUS CRISIS TEAM our experts assist in all areas of activity that may be affected by the coronavirus epidemic. We monitor the legislative work related to the coronavirus on an ongoing basis and follow the recommendations of the relevant authorities that may affect the business situation.

Questions and doubts should be addressed to: covid19@mddp.pl or directly to persons responsible for specific issues:

TAXES	Bartosz Głowacki	phone:+48 603 980 382, e-mail:bartosz.glowacki@mddp.pl
LABOR LAW	Wiktoria Cieślikowska	phone:+48 22 376 52 97, e-mail:wiktoria.cieslikowska@mddp.pl
PERSONAL DATA	Daniel Michalski	phone:+48 22 376 52 02, e-mail:daniel.michalski@mddp.pl
PAYMENT BACKLOGS, BANKRUPTCY AND RESTRUCTURING	Bartłomiej Sadura	phone:+48 737 883 705, e-mail:bartlomiej.sadura@mddp.pl
CONTRACTS	Aleksandra Grabarska	phone:+48 22 376 52 20, e-mail:aleksandra.grabarska@mddp.pl
CORPORATE FINANCE	Łukasz Zabłocki	phone:+48 22 320 48 52, e-mail:lukasz.zablocki@mddp.pl
FINANCIAL STATEMENTS	Magdalena Michniewicz	phone:+48 502 413 975, e-mail:magdalena.michniewicz@mddp-outsourcing.pl
BOOKKEEPING	Agnieszka Tyczyńska-Osińska	phone:+48 504 120 116, e-mail:agnieszka.tyczynska-osinska@mddp-outsourcing.pl
PAYROLL	Barbara Kochańska-Mierzejewska	phone:+48 516 281 916, e-mail:barbara.kochanska-mierzejewska@mddp-outsourcing.pl