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COVID-19 Updates

Short-Time and Flexible Work Scheme “KURZARBEIT” Implementation on the Local Labor Market

Publication: ZRVP

The economy relaunching plan by application of the “KURZARBEIT” program – short-time and flexible working hours – successfully applied in Germany, in the context of the financial crisis in the period 2008-2009, will be introduced also in Romania. At this moment, the legal framework for the implementation of the program is being finalized.

 

What does the “KURZARBEIT” program consist in?

  • It is a flexible system of work organization starting from the premise of any employer’s right to unilaterally decide, in the period of reduction or temporary interruption of its activity, the reduction in its employees’ working hours, with the corresponding reduction in their salaries. In this program, the state covers a part of the difference between the reduced salary and the normal salary.
  • According to the economic relaunching plan established by the Government, the Romanian State will subsidize 75% of the difference between the normal salary and the one for short-time working hours, and the companies that can benefit from the scheme are the ones with a 10% turnover decrease as compared to the similar month of the last year.

Similarities and differences between the “KURZARBEIT” program and the possibility of reduction in the working hours with the corresponding reduction in the salary, provided by art. 52, paragraph (3) of the Labor Code

  • Similarities:
  • these imply the adjustment of the working hours to the existing activity volume;
  • the value of the granted salary corresponds to the provided activity;
  • they apply temporarily, until the employer’s economic situation redresses.
  • Differences:
  • in case of reduction in the working hours under art. 52, paragraph (3) of the Labor Code, employees shall benefit only from the salary corresponding to the short-time working hours, while in the “KURZARBEIT” program, the state will cover a part of the difference between the reduced salary and the normal salary;
  • the possibility to reduce the working hours under art. 52, paragraph (3) of the Labor Code implies the reduction in the working hours from 5 to 4 days, while the “KURZARBEIT” programs allows a more flexible adjustment of the working hours to the workload, better meeting employers’ concrete needs.

When does it apply?

  • The measure has a temporary character, having the purpose to redress the economy characterized by a decrease in activity in all its sectors, caused by the COVID-19 pandemic. According to the Government’s official plan, the measure may be implemented for a minimum term of 3 to 6 months, and it will apply in case of reduction in the working hours for at least 10 % of a company’s employees.

How does it apply?

  • by employer’s unilateral decision;
  • by the introduction of reduced working hours, and namely by adjustment of the working hours to the company’s necessities, with the employer’s possibility to establish flexible working hours.

What are the employer’s advantages?

  • the employer has the possibility to redress its business, continuing to benefit from its employees’ work;
  • the employer grants salary rights corresponding to the actually worked time;
  • this may organize its employees’ activity according to its concrete needs, thus avoiding dismissals.

What are the employees’ advantages?

  • they keep their jobs, the risk of dismissal being minimized;
  • they benefit from total remuneration that is higher than the salary corresponding to the actually worked time;
  • they benefit from relevant work seniority for social insurance and social health insurance.

 

Read the Romanian version (PDF)

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BUSINESS CONTINUITY AT ZRVP

The COVID-19 crisis is fast-moving and hard to predict. At ZRVP, our highest priority is the health and wellbeing of our people, our clients and our communities.

Our response measures are aligned with the recommendations and decisions of the Romanian authorities and ensure the safety of our people and visitors as well as the continued provision of key client services and operations.

We would like to assure you that ZRVP will continue to operate seamlessly during the next period, both remotely and at our offices. We will provide continuous legal service to all our clients and assist you in the navigation of the wide range of legal and economic impacts of COVID-19 that are leading to uncertainty and volatility across all sectors. We are closely monitoring the situation as it evolves and will provide up-to-date information related to the wide range of issues arising during this challenging time.

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Kind regards,
Your ZRVP team