Tax-paid leave, rescue for the incapable. The Czech Kurarbeit is in danger of being abused

---

Czech kurzarbeit is in the world. The government is now sending a tool to parliament to help pay part of employees wages in the event of serious economic difficulties. Many experts across the market welcome the fact that any model of kurarbeit, which is a common help in many countries, is being developed in our country as well. However, they still call for modifications to the proposal so that it is not misused. The unions want higher compensation.

Kurzarbeit is a part-time job for economic difficulties. The company pays people only for the hours worked, the state provides them with a part of their earnings for the time not worked, and thus equals their salary. This tool is common in many countries, the closest to our conditions is the German model, according to which the term kurzarbeit was also used.

However, the proposed conditions for Czech exchange work are slightly different than in Germany. The government has stipulated that the exact conditions for aid in times of crisis will be set by the government in its regulation. It determines the region, industry, the extent of part-time work and the period for which part of the wage would be paid by the state.

The worker could stay at home up to four days a week. He would receive 70 percent of his net salary for hours not worked, but not more than the national average wage. The aid could be paid for a maximum of one year. It could be given to employees with a contract of indefinite duration who have been in the company for at least a quarter of a year. Companies would pay for health insurance from the entire current earnings, social insurance from 70 percent of gross wages.

The Minister of Labor and Social Affairs. Jana Maláčová (ČSSD), after long negotiations, we have found a compromise. It is important for our ministry to protect employees. I consider seventy percent compensation to be very good news for employees, who will then be able to benefit from this amount while companies are involved in the exchange rate.

She wants her proposal to be discussed in a legislative emergency regime and come into force on 1 November. It would replace the ending Antivirus program, which was exceptionally accepted due to the coronavirus pandemic in the spring of this year and compensated companies for partly the cost of employees who had to stay at home.

Companies want transparency, employees more compensation

Although most experts praise the fact that there is constant help in the Czech Republic for companies in crisis, many of them point out the shortcomings of the government's proposal.

For example, the Association of Small and Medium-sized Enterprises criticizes the fact that kurzarbeit will only trigger a government decision.

Companies would welcome clear and transparent conditions in which they can take advantage of the course. This includes the assessment of companies' applications. This will require economic knowledge and experience from the company environment, and companies need to be assessed equally in all regions. In the case of the announcement of the exchange rate work by region, an imbalance may arise in the competitive environment warns by Eva Svobodová, a member of the Board of Directors and CEO of the association.

According to her, employers are also bothered by the low amount of support compared to a similar instrument in Germany. Social security contributions remain on the shoulders of employers, which reduces the actual state support announced to 70 percent to the actual 54 percent. Employers demand at least a reduction of the amount paid. In Germany, contributions are paid at a reduced rate of 80 percent. According to her, it would be best if the government extended the current Antivirus program until the end of the year and adjusted the proposed exchange rate until then.

The Chamber of Commerce also has comments on the proposal approved by the government, which it will apply in the next legislative process.

Vladimír Dlouhý, President of the Chamber of Commerce said, we criticize the proposal that it will be possible to use a course work even if the company does not have a job for one employee, for example with several thousand employees. An individual employee is therefore an undesirable signal to the business sector that employers should always rely on the state, even in relatively simpler situations. The costs of exchange work, which the state transfers to entrepreneurs through insurance of a fictitious, not actually paid wage, where health contributions are to be calculated from the average wage before entering the exchange rate, may lead employers to lay off employees rather than enter the exchange rate regime. In the budget, the payment of unemployment benefits is more expensive than the payment of benefits in the exchange rate.

He warns that this approach may in some cases lead to the abuse of the Kurarbeit, even when its activation is not necessary . Like the association of companies, the chamber is convinced that legislators should also consider the set financial burden of employers when discussing exchange rates in parliament.

The unions also criticize the proposal, but from a different perspective. In turn, they find insufficient financial assistance from employees.

Josef Středula, head of the Czech-Moravian Confederation of Trade Unions, referring to the German model said, The only ones who will pay for it are employees who lose 30 percent of their income. This is not a good choice, it is a misunderstanding of what the exchange rate is.

If we are already taking over a system, then the whole. For a significant part of German companies, mostly industrial, employees receive 100 percent of their salary, points out the head of trade unions Středula, adding that both parties must agree on the amount of compensation in Germany.

According to lawyer David Šupej from Sedlakova Legal, the positive thing about the announced changes is that there has been an increase in cases where employees can get support and this will allow employers to reduce costs.

On the contrary, restrictive conditions for the maximum amount of aid may have a negative effect. Even so, according to him, it will be a significant saving on the part of the employer.

Šupej said, administratively, the conditions of support do not seem more demanding than the administration of the Antivirus program. The whole application process should work electronically, so in this respect it should not be an additional burden for employers compared to what they encountered with Antivirus.

According to Trinity bank economist Lukáš Kovanda, the Antivirus program, which ends last October, works well, especially compared to other government programs to support the economy during the covid-19 crisis.

Kovanda said. however, this is paradoxically a key argument against the introduction of permanent exchange rate work. that it is permanent, it will tempt politicians to try to use it, for example, in violation of the rules for its launch, or even to bend these rules, for example, depending on the election cycle.

He also claims that the Czech economy must necessarily undergo a fundamental transformation.

Kovanda said, In this sense, it is at a different stage of development than neighboring Germany, where the Czech government is inspired by the Kurzarbeit there. "Of course, this is accompanied by a temporary, even significant increase in the unemployment rate. By opening Pandora's box of kurarbeit, there is now a risk that we will dampen the highly desirable process of creative destruction at the expense of the taxpayer.

According to him, in practice this may mean that domestic employees and entrepreneurs, generally taxpayers who work, will pay some kind of paid leave to their fellow citizens, whose work no one cares much about.

Kovanda said, in the spirit of modern socialism, the economy will preserve and nourish already useless jobs, which in turn means the massive society-wide waste we know from before 1989. The more serious this society-wide waste, the more agile politicians will be in their likely endeavors. Sooner or later, the rules of the Kurarbeit could be abused in some way, or even bent or adjusted in order to artificially maintain employment and gain political points.

What forms of assistance does the Antivirus program offer

Two types of wage contributions

• Mode A:

In the case of quarantine, the employee receives wage compensation in the amount of 60% of the average reduced earnings.

In the event of the closure of an operation by a government decree, the employee receives wage compensation in the amount of 100% of the average earnings.

• Mode B:

Barriers to work on the part of the employer due to the order of quarantine or childcare for a significant part of employees (30% and more) - the employee receives wage compensation in the amount of 100% of average earnings.

Limitation of the availability of inputs (raw materials, products, services) necessary for the activity, the employee receives a wage compensation in the amount of 80% of the average earnings,

Limitation of the availability of inputs (raw materials, products, services) necessary for the activity, the employee receives a wage compensation in the amount of 80% of the average earnings.

Limitation of demand for services, products and other products of the company, the employee receives compensation of wages in the amount of 60% of average earnings

Forgiveness of levies

• Mode C:

The state forgave social security contributions for companies with up to 50 employees in June to August, which will not reduce wages and lay off more than a tenth of people

Note:- This article is originally published in aktualne.cz. Follow This Trending Creations is posted by this article for general information only with small changes. All credits goes to aktualne.cz.