In view of the severity of the current situation regarding the outbreak of the COVID-19 virus (“Coronavirus”), we have prepared a special newsletter containing all important information that may affect your business and your employees.

Our company has set up a team of people to follow the current situation and evaluate all economic, tax, and legal issues related to the impact caused by the COVID-19 virus.

I would like to ask you to find about a half an hour to read this article, as it contains some information that may be relevant to you.

With effect from 16 March 2020, as of 6:00 am, a state of emergency has been declared in the territory of the Slovak Republic, by virtue of which all small-trade operations and all operations providing services shall be closed, with the exception of grocery shops, pharmacies and shops providing medicinal devices, chemist’s, post offices, banks and insurance offices, petrol stations, and several other operations. All persons who are returning from abroad shall stay in isolation in facilities defined by the Ministry of the Interior of the Slovak Republic for a period of 14 days.

Additional measures and detailed information can be found in Slovak HERE

Employment law

Preventive measures of the employer

Pursuant to the provisions of Section 5 of Act No. 124/2006 Coll. on Occupational health and safety, and on amendments and supplements to certain acts, the employer shall be obliged to apply the general principles of prevention in the implementation of measures necessary to ensure safety and health at work, including securing information, education and organization of work and resources.

In order to eliminate the risk of spreading the COVID-19 disease, the employer shall be obliged to evaluate the risk at the workplace and, if necessary, shall be entitled to take and implement appropriate measures to protect the health of employees; for example: cancel business trips and company events, secure available sanitary preparations, educate employees, minimize visits to the workplace, isolate employees at risk, order medical examinations, provide the possibility to work from home, etc.

In addition to the aforementioned, the employer shall be entitled, in order to protect the health of other employees, to demand from employees that they report their stay in afflicted areas or other facts relevant to health protection. Despite the fact that this information relates to employees’ private lives, in this case the employer’s interest in protecting health at work takes precedence and the employer shall be entitled to request this information from the employees in order to find out whether employees or their family members have visited an afflicted area or whether they have been in contact with a person diagnosed with Coronavirus.

In the event the employer is aware of the fact that an employee has returned from an affected country or was in contact with an infected person, yet continues to go to work, the employee shall be entitled to demand that the employee undergoes an extraordinary medical examination in order to detect the presence of the virus and the employee shall be obliged to undergo such examination. In the event the employer employs employees’ representatives, the employer shall be obliged to discuss this measure with them first.

Quarantine

On the basis of a decision taken by the central crisis management team, all persons who are returning from abroad shall stay in isolation in facilities defined by the Ministry of the Interior of the Slovak Republic for a period of 14 days.

In the event an employee shows no symptoms of Coronavirus but has returned from an affected country or area, such employee shall monitor their health status during the 14 days following their return. At the same time, it is desirable that the employee informs the employer of his/her return from such area. If an employee suspects he/she may be infected yet is showing no symptoms, such employee may, at his/her discretion, undergo a 14-day home isolation (voluntary quarantine).

An employee who has not visited an afflicted area and is showing no symptoms cannot on his/her own accord stop going to work, except when such employee has made an agreement with the employer to take leave or to work from home. The absence of an employee at work without a just cause shall be considered misconduct.

In view of the aforementioned, there are two types of quarantine:

A. Mandatory quarantine

If an employee is subject to quarantine ordered by the Public Health Authority, the employer shall excuse the absence of the employee at work for the duration of the quarantine. Where an employee is ordered into quarantine, the employer shall be obliged to assign the employee work of a different nature or in a different place (this also includes working from home – the so-called “home office”).

The employer does not need the employee’s consent in order to assign him/her work of a different nature as a result of the ordered quarantine.

In the event the employer cannot provide the employee with work of a different nature or work at a different place, this shall constitute an obstacle to work on the part of an employee. The employee shall be obliged to demonstrate such obstacle to work and its duration to the employer. The relevant medical facility shall be obliged to attest such document demonstrating an obstacle to work and its duration and the employee shall be obliged to inform the employer of such obstacle and its expected duration without undue delay.

A physician shall confirm that the person who was ordered into quarantine to be temporarily incapacitated for work. In the event of an employee’s temporary incapacity for work during an ordered quarantine measure, the employee shall be entitled to claim compensation from the employer during the first 10 days of the quarantine measure in the amount of 25% of the daily assessment base during the first three days of quarantine and 55% from the fourth to the tenth day of quarantine (provided that the employee does not receive an income from such employment). From the eleventh day onwards, the employee shall be entitled to a sickness benefit under Act No. 461/2003 Coll. on Social insurance in the amount of 55% of the daily assessment base. Self‑employed persons with compulsory sickness insurance, persons with voluntary sickness insurance and insured persons within the period of protection shall be eligible for sickness benefit under the specified conditions from the first day of the ordered quarantine measure.

B. Voluntary quarantine

If an employee suspects he/she may be infected yet is showing no symptoms, such employee may, at his/her discretion, undergo a 14-day home isolation. Pursuant to Section 141 subsection 3 letter b of Act No. 311/2001 Coll. of the Labour Code (“The Labour Code”), the employer may provide the employee with time off from work also due to reasons other than those specified in the provisions of Section 141 subsection 2 of the Labour Code (obstacle to work on the part of an employee) with or without wage compensation. The employer can, therefore, agree with the employee on so-called unpaid leave or agree with the employee that the employer will provide him/her with wage compensation for the duration of the “voluntary quarantine”.

Another option is to make an agreement with the employee that the employee will take leave during a certain period of time (until the employee receives negative results of the laboratory test).

Employer’s options and employees’ claims

The employer shall have the following options with respect to the employee:

• Excused absence from work (substantive personal obstacle to work under Section 141 subsection 1 of the Labour Code)

An employer shall excuse the absence from work of an employee for periods of the employee’s temporary incapacity to work due to quarantine, attending to a sick family member and during periods of caring for a child younger than ten years of age who, for substantive reasons, may not be in the care of a children’s educational facility or school. During such periods, an employee shall not be entitled to wage compensation.

• Working from home, the so-called “home office” – performing work from the employee’s place of residence

If there is no ordered quarantine, the employer shall not be entitled to order the employee to work from home via “home office”, unless such method of work performance has been agreed upon, for example in the employer’s internal regulation or the employment contract. If the employment contract does not specify such place of work performance, an agreement with the employee should be made to change it (in writing), as this constitutes a change in working conditions. Working from home under such conditions may only be possible after concluding an agreement with the employee. If the employee is already in isolation at home (in order to prevent the spread of the COVID-19 disease) or if it is not possible to change the contract terms in writing, it is important to document this in another demonstrable way, e.g. via email. Working from home can also be employed to reduce the number of employees at the workplace (to increase the protection of employees who commute from longer distances and use public transport, to protect employees who care for the elderly, for employees with children when schools are closed, for employees in “open space” workplaces with a higher density of people at one workstation, and for other reasons).

• Drawing of paid holiday (Section 111 of the Labour Code)

When determining leave, it is necessary to take into account the employer’s tasks and the justified interests of the employee. The employer may request the employee to draw his/her paid holiday. The employer may do so no sooner than 14 days prior to its planned drawing. This period may exceptionally be shortened with the employee’s consent. Since the current situation may be considered exceptional, it is possible to shorten this notification period, taking into account the circumstances. If the employer and the employee come to an agreement, the employee may start drawing paid holiday immediately.

• Drawing of substitute time-off

If an employee has undrawn substitute time-off, it is possible to determine the drawing of substitute time-off under the conditions specified in the provisions of Sections 121 and 122 of the Labour Code. Drawing of substitute time-off for overtime work may in principle only be possible on the basis of an agreement with the employee (Section 121 subsection 3 of the Labour Code).

• Changing the timetable of work shifts

Pursuant to the provisions of Section 90 subsection 9 of the Labour Code, the employer shall be obliged to inform the employee of the distribution of working time at least one week in advance and with a validity of at least one week. However, when dealing with the situation via changes in the distribution of working time, such changes in the working timetable are subject to various factors such as the content of the employment contract, provisions on equal and unequal scheduling of working time, rest periods, etc. In view of this, it is necessary to first take into consideration the wording of the employment law documentation.

• Further obstacles to work on the part of an employee

Due to other reasons or at the employee’s request, an employer may provide an employee with time off from work with wage compensation for which the employee will later perform additional work as compensation (Section 141 subsection 3 of the Labour Code).

• Failure to designate work to an employee

In a particular case, where an employer, upon an assessment of risks and with a view of stopping the spread of Coronavirus, does not allow the “employees at risk” to perform work at the workplace and refuses their entry into the workplace or temporarily shuts down operation, this shall constitute an obstacle on the part of the employer for which an employee shall be entitled to receive wage compensation in the amount of the employee’s average earnings (Section 142 subsection 3 of the Labour Code), except if a written agreement with the employees’ representatives is concluded pursuant to Section 142 subsection 4 of the Labour Code (agreement on the definition of substantive operational reasons listed below).

This applies, for example, in cases where an employee had scheduled work shifts and the employer informed the employee that he/she will not designate work to him/her. The Labour Code does not contain time restrictions on the duration of this obstacle to work and, therefore, it is the employer’s responsibility to decide to what extent this measure shall be applied in the particular case.

An employee shall be entitled to wage compensation in the amount of his/her average earnings even if the employer is forced to temporarily cease production due to other operational causes (non-delivery of production components, materials, absence of supply services, etc.).

• Agreement on the definition of substantive operational reasons

If an employer defined in a written agreement with employees’ representatives substantive operational reasons that prevent the employer from designating work to an employee, this shall constitute an obstacle on the part of the employer for which an employee shall be entitled to receive wage compensation in the amount stipulated in the agreement, at a minimum of 60% of average earnings. This means this claim would have to be negotiated with the employees’ representatives on the basis of a separate written agreement on wage compensation lower than the amount of the average monthly earnings, i.e. the employees’ representatives would have to agree with this reduced claim.

The conclusion of this agreement, if properly written and substantive operational reasons are sufficiently defined, may save the employer up to 40% of the wage compensation costs during this period.

The aforementioned options may also be implemented if the particular employee does not have the disease or is potentially infected but the employer, upon assessment and evaluation of the situation, takes the specified measures in order to prevent the spread of the disease.

• Additional measures for employers

If you are interested in further options that may be used by employers to mitigate the economic impact, do not hesitate to contact us and we can go through the details individually.

Measures of the Social Insurance Agency regarding Coronavirus

Sickness benefit

With regard to the current risk of spreading Coronavirus, the Social Insurance Agency informs insured persons that if “a closure of pre-school or social service facilities providing care for children or of schools (hereinafter referred to as “facilities”) takes place as a result of Coronavirus, the insured persons shall be entitled to claim nursing benefit, regardless of whether it was a state-owned or private facility, and this shall be acknowledged as being temporarily incapacitated for work and they shall be entitled to a sickness benefit.”

Nursing benefit

“With regard to the emergency situation related to the outbreak of Coronavirus, the Social Insurance Agency announces that, after the announcement of emergency measures taken by the central crisis management team and in accordance with the decision of the competent authorities to close schools, it shall grant nursing benefit to those who are taking personal and full-time care of a child of up to 11 years of age (10+364 days) throughout the 14-day period during which schools and pre-school facilities will be closed. Before the end of this period, the Social Insurance Agency will announce, on the basis of further developments, how the parents should proceed if the schools/pre-school facilities remain closed,” said Peter Višváder, the spokesperson of the Insurance Agency.

The forms in Slovak can be found here:

Application for nursing benefit for Coronavirus (pdf)

Application for nursing benefit for Coronavirus (word)

Forms in English and German:

New form for nursing benefit from the Social Insurance Agency

Neues Formblatt – Pflegegeldantrag von Sozialversicherungsanstalt

With regard to the need to eliminate the spread of the disease, specific procedures have been adopted that relate to the application of claims for nursing benefit and sickness benefit for suspected or diagnosed cases of Coronavirus. These procedures can be found on the website of the Social Insurance Agency.

Taxpayers

The Ministry of Finance of the Slovak Republic together with the Financial Administration are gradually introducing measures to prevent the spread of Coronavirus. In particular, the following measures have been adopted in recent days:

• Income tax return filing (16 March 2020)

If the taxpayer fails to meet the deadline for income tax return filing or if the taxpayer perceives other obstacles as a result of the current situation, the taxpayer may request to waive the missed deadline. The Financial Administration shall take into account justified requests to waive the missed deadline.

We recommend using the legal possibility of extending the deadline for the filing of the tax return by three months or by six months in the case of foreign income. Announcement of extension of the deadline shall be filed by taxpayers by 31 March 2020 by electronically filing the prescribed form. The template for the deadline extension announcement can be found HERE and more information can be found HERE.

• Modified office hours, use of protective equipment and mobile offices

Starting on 16 March 2020, the Financial Administration offices shall operate under modified office hours – the filing offices will be open on each business day from 8:00 AM to 11:00 AM and client zones will be open on opening days (Monday, Wednesday, Friday) from 8:00 AM to 11:00 AM.

More practical information can be found on the FA portal

• General taxation obligation deferral of all taxpayers

“The Financial Administration will not sanction natural and legal persons in the event of their non‑compliance with the legal deadline for the income tax return filing if the taxable person meets this obligation by 30 June 2020. The Financial Administration will not sanction them for late submission of the announcement on withholding and levying taxes and on non-payment of this tax in the specified period if the taxable person meets these obligations by 30 June 2020.”

More practical information can be found on the FA portal

Proposals for additional measures for self-employed individuals and taxpayers

Based on the information provided by the press department of the Ministry of Finance of the Slovak Republic on 16 March 2020, the following proposals for measures, which require the legislation to be changed and which will be negotiated in the near future by the new government and parliament, were submitted during discussions and requests with business associations.

• Negotiations with banks on the possibility of postponing loan and mortgage repayments without a negative record for the debtors in the register. Introducing the possibility of freezing interest and principal repayments for both natural persons (employees) and legal persons.
• Simplifying and making the provision to grant short-term preferential loans to companies in selected sectors more attractive through the Slovak Guarantee and Development Bank.
• Following the example of Germany, allocation of funding to promote private-sector investment, e.g. through the SIH and the EIB. Introduction of systematic support for enterprises’ investments in fixed assets – “tax super-depreciation” and accelerated depreciation process.
• Adjustment of tax loss write-off.
• Extension of the deadline for the filing of tax returns for all taxpayers from 31 March to 30 June 2020, even for those who have filed their tax return within the original deadline. Extension of the deadline for VAT payment. Waiver of late payment penalty.
• Temporary complete suspension of social and health insurance contributions for the self‑employed for a period of three months (March – April – May), where it is proposed to subsequently divide such contributions among the following 18 months’ payments.
• Exemption of employees’ salaries from social and health insurance contributions and income tax.
• Radical simplification of the conditions for the granting of a contribution for job retention even for small businesses and self-employed individuals.
• Funding the costs of technology-driven electricity generation from the state budget for a limited period of time.
• Support of the EU-level debate on relocating the current ESIF to cover the impact of the crisis and rescue the economy, to initiate early measures and rules.
• Change in nursing benefit conditions.
• Extension of the deadline for customs debt payment by 30–40 days.
• Not imposing penalties on companies if these are unable to fulfil the requirements of e.g. public contracts, and limiting inspections of businesses and self-employed individuals.

The Ministry of Economy of the Slovak Republic has prepared proposals for measures to help the economy amid the outbreak of the COVID-19 virus

This material was based on suggestions received from individual employer and business associations and unions. We tried to describe the listed measures in such a way as to take into account as much as possible several comments on the same subject. It was not always possible and not all measures could be included in the material due to their potential contradictions or exceptional detail. A number of themes and suggestions are set out in broader concepts in order to include as many comments taken into account as possible.

For more information, please click HERE.

• Dedicated website for Coronavirus in Slovakia

Due to the rapidly changing circumstances, we recommend that you follow the dedicated government website, where all important information regarding the restrictions in the current situation are published.

The current situation is not easy and we will continue to monitor and evaluate it closely in order for our team to be ready to advise you on which measures your business may employ to reduce the economic impact that will affect the entire economy.

We will keep you informed of further developments.

If you have any questions, do not hesitate to contact us and we will be happy to provide you with advice in these difficult times.