The 60/40 Measure Has Been Prolonged Until 31 March 2021

Decree No. 416/ 30.12.2020 for amendment and supplementation of Decree No. 151/ 2020 of the Councils of Ministers Defining the Requirements and Procedure for Payment of Funds for Preservation of Employment after the Period of the State of Emergency and the Extraordinary Epidemic Situation was promulgated in State Gazette, issue 2 dated 8 January 2021. Below, the changes introduced with Decree No. 416/ 30.12.2020 are briefly explained.

1. The effect of the 60/40 measure has been prolonged for another three months – from 1 January 2021 until 31 March 2021.

2. Employers will be able to apply for funds for preservation of employment for employees whose work has been suspended, for which part-time working time has been established or who have been granted a paid annual leave without their consent for the period between 13 March 2020 and 31 December 2020 (and not for the period of extraordinary epidemic situation, currently in effect). This means that employers who have suspended work, established part-time working time or who have granted  a leave without the consent of the employees after 31 December 2020 cannot apply for this measure.

3. In case that the application is on the grounds of preservation of employment for employees following a notice to the Employment Agency for collective redundancies under Art. 130a of the Labour code and Art. 24 of the Employment Promotion Act, the employment must had been preserved for the period between 13 March and 31 October 2020.

4. The funds payable under the measure shall be calculated based on the social security income for October 2020.

5. Employers who have received funds for preservation of employment under the Decree No. 151/ 2020 shall pay remuneration to the employees at an amount not less than the amount of the social security income for October 2020, and shall pay the due social security contributions for the respective month.

6. The requirement for the employers to have incurred 20% decrease in revenue remains into effect, but after the amendments enter into effect, the decisive factor will be whether the applicants are incorporated before or after 1 December 2019. The applicants incorporated before 1 December 2019 are required to have incurred decrease in revenue of no less than 20 per cent for the month preceding the month of submission of the application for payment of funds, as opposed to the same month of the preceding calendar year. The applicants incorporated after 1 December 2019 are required to prove decrease in revenue of no less than 20 per cent for the month preceding the month of submission of the application for payment of funds as opposed to the average revenue for 2020.

7. The funds payable under the 60/40 measure shall be to the account of the state budget (unlike before when they were for the account of the Unemployment Fund of the state social security).

The amendments introduced by Decree No. 416/ 30.12.2020 shall enter into force on 1 January 2021, but funds for the period between 1 January 2021 and 31 March 2021 shall be paid after receiving of a positive decision by the European Commission for the compatibility of the aid with the internal market. The applications for payment of funds for the period between 1 October 2020 until 31 December 2020, which have been submitted before 15 January 2021 shall be reviewed and financed under the old regime.

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.