Upcoming Amendments to the Legal Regime of Compensating Employers With the Aim of Protection of Employment During the State of Emergency

A meeting of the National Council for Tripartite Cooperation was held on 13 April 2020, in which amendments in Decree No 55 dated 30 March Defining the Requirements and Procedure for Payment of Compensations to Employers Who Have Suspended Work Due to the Announced State of Emergency were discussed (hereinafter “Decree No 55” or “the Decree”).

The present article shall briefly review the scope and contents of the currently intended amendments and supplementations to Decree No 55. Please bear in mind that the intended amendments described hereinbelow have not been definitively adopted. After the definitive adoption of the amendments to the Decree we shall timely inform you, in case that there are any substantial differences.

Along with bringing Decree No 55 in compliance with the latest amendments and supplementations to the Act for the Measures and Actions During the State of Emergency, the changes in the Decree aim to improve the wording of certain provisions therein, making it more precise since their previous wording was unclear and practically led to many questions, some of which did not receive an answer.

1. Firstly, as expected, the provision on the amount of the compensations will be brought in compliance with the latest legislative amendments and shall provide that the compensation shall be at amount equal to 60 per cent of the amount of the social security income for January 2020 and of the social security contributions for the expense of the employer for the same month for each employee.

2. According to another amendment to the Decree, it is now explicitly stated that compensations will not be due for employees in unpaid leave.

3. After the promulgation of Decree No 55, many contradictory interpretations have arisen in practice since the provisions of the Decree were not clear in regard of the amount of remuneration that is to be paid by employers who have established part-time working regime. The provided supplementations to Decree No 55 now explicitly confirm the understanding of the public authorities, which was applied in practice until now, that employers who have been granted compensations on the grounds of established part-time work regime and having 20% decrease in income, shall pay the full amount of the remuneration to their employees, as defined for full working time, and the social security contributions thereto.

4. Another amendment to the Decree, once again aiming to precise the wording, now clearly states that the employers shall keep the employment of their employees for whom compensations are received, for an additional period which is no less than the period for which compensations are received (this is not a change in essence, but merely in wording).

5. It is now explicitly provided for that the compensations shall be paid monthly by the National Social Security Institute.

6. Two more economic activities, whose carrying out by an employer will entitle him to receive compensation on the grounds of Art. 1, Para. 1 of Decree No 55 (upon order by a public body for the suspension of work, without proving a decrease in income):

• 53 Training of vehicle drivers;

• 91 Day care for infants (private sector).

The amendments to Decree No 55 shall be applied also to employers who have submitted applications for compensations before their entry into force.

This material is not exhaustive, is only of general nature and does not represent a specific advice or consultation. Should any additional questions arise, please do not hesitate to contact us at tel.: 02/943 37 00, fax: 02/943 37 07, е-mail: office@afa.bg or at: 38, Oborishte Str., Sofia 1504.