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Romania: “Post Covid-19” governmental support for the labour market

12 June 2020 – New measures to strengthen the labour market adopted by the Romanian government via Emergency Ordinance no. 92/2020 establishing active support measures for employees and employers in the context of the epidemiological situation caused by the spread of SARS-CoV-2 coronavirus, as well as the amendment of several normative acts (“G.E.O. no. 92/2020”), came into force on 29 May 2020.

These measures, generally seen as “post COVID-19” actions, are mainly aimed at (a) providing financial support to employers to reduce the negative social and economic effects caused by the spread of COVID-19 and, implicitly, (b) to prevent an increase in the unemployment rate.

G.E.O. no. 92/2020 provides three main categories of mechanisms to support the labour market:

A. re-imbursement of part of the employee’s salary;

B. facilities for employers offering jobs to categories of individuals for whom the insertion / reinsertion on the labour market is more difficult to achieve;

C. maintenance of the technical unemployment allowance / allowance provided by Government Emergency Ordinance no. 30/2020 amending and supplementing several normative acts and establishing several measures in the social welfare sector in the context of the epidemiological situation caused by the spread of SARS-CoV-2 coronavirus, as further amended and supplemented (“G.E.O. no. 30/2020”).

A. Re-imbursement of part of the employee’s salary

As of 1 June 2020, the Romanian government is granting eligible employers 41.5% of a qualifying employee’s basic salary corresponding to their job position, but no more than the capped amount representing 41.5% of the national gross average monthly wage (i.e. not more than RON 2,253 / approx. EUR 466) for a period of three months.

Employers carrying out multiple activities,  at least one is subject to the restrictions established by the competent authorities, have the possibility to choose between: (a) the re-imbursement provided by G.E.O no. 92/2020, or (b) the technical unemployment allowance provided by G.E.O. no. 30/2020[1].

Eligibility criteria

This measure may apply to:

  1. employers whose employees had their individual employment agreements suspended and who benefited during the state of emergency / the state alert from the technical unemployment allowance, as per G.E.O. no. 30/2020;
  2. employers whose employees had their individual employment agreements suspended as a result of the temporary interruption or reduction of activity due to economic, technological, structural or similar reasons[2] and did not benefit during the state of emergency / the state of alert from the technical unemployment allowance, as per G.E.O. no. 30/2020.

    Another requirement to benefit from this measure states that the above-mentioned employees should have: (a) had their individual employment agreements suspended for at least 15 (fifteen) days during the state of emergency / the state of alert and (b) received the technical unemployment allowance (either under G.E.O no. 30/2020 or under Law no. 53/2003 – the Labour Code).

    The following categories of employers cannot benefit from this instrument supporting the reopening of businesses:

    (a) public institutions and authorities; and

    (b) employers that are subject to bankruptcy, dissolution, liquidation procedures or whose activities are suspended or restricted for other reasons than the Covid-19 pandemic at the date of requesting this support.

    Limitations

    Employers benefiting from the above measure have the obligation to maintain the employment relationship of the relevant employees until 31 December 2020.

    This rule does not apply: (i) to seasonal workers and (ii) if the termination of the individual employment agreement occurs for reasons undisputable to the employer (e.g., resignation).

    Procedure

    The procedure to obtain the above-mentioned re-imbursement as set forth under G.E.O no. 92/2020 is carried out electronically and includes the following main steps:

    1. employers eligible to benefit from the allowance pay the salaries of employees;

    2. employers submit to the competent unemployment agency the following documents to obtain the re-imbursement from the unemployment insurance budget:

    (a) a standard application form signed by the legal representative of the employer;

    (b) an affidavit of the legal representative of the employer stating, among others, that the individual employment agreements of the employees were suspended during the state of emergency / state of alert and that the employer did not choose governmental support consisting of the technical unemployment allowance as per G.E.O no. 30/2020;

    (c) the list of the employees for which the allowance is requested;

    The templates of the above-mentioned documents are approved via Order of the President of the National Unemployment Agency no. 457/2020, which came into force on 5 June 2020.

    3. The allowance is paid to employers from the unemployment insurance budget within a maximum of 10 (ten) days.

    Employers take full responsibility for the accuracy and veracity of the documents submitted.

    B. Facilities for employers offering jobs to categories of individuals for whom the insertion / reinsertion on the labour market is more difficult to achieve

    Another measure introduced by G.E.O. no. 92/2020 provides that employers hiring several categories of individuals, for an unlimited period, on a full-time basis, will receive a monthly allowance of 50% of the employee's monthly salary (but no more than RON 2,500 / approx. EUR 515), for each employee, for a period of 12 (twelve) months.

    Employers benefiting from this measure have the obligation to maintain the employment relationships of the related employees for a period of at least 12 (twelve) months from the end of the 12-month period mentioned above.

    This measure may apply to employers that, up to 31 December 2020, hire the following categories of individuals:

    1. persons over the age of 50 (fifty), whose individual employment agreements were terminated for reasons undisputable to them, during the state of emergency / the state of alert, registered as unemployed in the records of the competent unemployment agencies,

    2. persons aged between 16 (sixteen) and 29 (twenty-nine), registered as unemployed in the records of the employment agencies; or

    3. Romanian citizens performing their duties outside Romania, based on individual employment agreements concluded with foreign employers that have ceased for reasons undisputable to the employees, by way of dismissal.

    The following categories of employers cannot benefit from these facilities:

    (a) public institutions and authorities; and

    (b) employers that at the date of requesting these facilities are subject to bankruptcy, dissolution, liquidation procedures or whose activities are suspended or restricted for other reasons than COVID-19 pandemic.

    The Order of the President of the National Unemployment Agency no. 456/2020, which came into force on 9 June 2020, approves the procedure for granting the above-mentioned facilities.

    C. Maintenance of the technical unemployment allowance / allowance provided by G.E.O no. 30/2020

    The technical unemployment allowance / allowance provided by G.E.O no. 30/2020 for employers / certain professionals whose activity has been reduced / interrupted as a result of the effects of the COVID-19 outbreak will continue to be granted after 31 May 2020[3].

    The beneficiaries will be the employers / professionals carrying out activities in areas where restrictions were maintained according to Law no. 55/2020 on measures to prevent and combat the effects of the COVID-19 pandemic.

    For more information on the topic, please contact Mădălina Anghenie, Associate, at

    e-mail

    , and Mihaela Teodoreci, Associate, at .


    [1] i.e., 75% of the basic salary corresponding to their job position, but no more than the capped amount representing 75% of the national gross average monthly wage.

    [2] As per Art. 52 para. (1) letter c) of Law no. 53/2003 – the Labour Code

    [3] The technical unemployment allowance / allowance provided by G.E.O no. 30/2020 will be granted until the related restrictions provided by Law no. 55/2020 on measures to prevent and combat the effects of the COVID-19 pandemic are released.