Rechts-, steuer- und buchhaltungsdienstleistungen aus einer hand


Wage Subsidy

The economic processes caused by the coronavirus pandemic are adversely affecting the situation of many employers and employees. In this newsletter, we summarize the discounts and forms of support available today that are closely related to employment.
   A) Wage subsidies for employment in reduced working time
Government Order 105/2020 (IV.10.) on wage subsidies entered into force on 16 April 2020 and was amended shortly thereafter, making wage subsidies more widely available since 29 April 2020, on much more favourable terms than the initial rules. However, wage subsidies have many detailed rules even after the amendments, the full description of which would go beyond the scope of this article, so we summarize the main conditions of the subsidies.
The point of the wage subsidy is that if the employee’s working hours are reduced after the declaration of the emergency due to the emergency, then the state pays to the employee 70% of the proportional basic salary for the lost working time due to the reduction, but not more than HUF 112,418 per month for 3 months as a wage subsidy.
By reducing working hours, new working hours should fall between 25-85% of previous working hours. In the case of an employee previously employed 8 hours a day, the reduced working time should be between minimum 2 and maximum 6.8 hours in order to meet criteria of wage subsidy.
When determining the extent of the reduction in working time, it is also worth considering whether the reduced working time exceeds half of the previous working time or not. If the new working hours are higher than half of the previous working hours, then the parties must also agree on a so called individual development time, for which the employee is also entitled to a salary, but is not obliged to work. The employer is obliged to pay salary for the individual development. The level of wages is not regulated by the Government Order, however, according to the interpretation of the National Employment Service, the wage paid for the individual development time must be such that the wage subsidy and the wage paid for the work reach the previous basic wage.
Individual development time should be 30% of lost work time.
Given that individual development time is a new, specific category of labor law, its criteria should be regulated by the Government Order. Unfortunately, the Government Order does not contain these detailed rules.
The specific nature of individual development time is that it does not qualify as working time, but carries certain features of working time. In the absence of a statutory provision, it is uncertain how and what development exactly the employee is obliged to make, and whether and to what extent the employer has obligations, power to instruct, exercise control and right of disposition in this area.
A further condition of the allowance is that the employer does not terminate the employment of the employee receiving the allowance during the period of the allowance and in the following month.
If the parties violate the terms of the wage subsidy, the employer is obliged to repay the subsidy.
It is also worth being aware that there is no way to appeal against a decision rejecting a grant, and there is no judicial remedy in such case. It is not possible to appeal or initiate a judicial review against a negative decision. In case of rejection, the application can be submitted for the same employee once again.
Before submitting the application for support, it is worthwhile for the employer to think in advance for which establishment and employees he wants to use it. The application may be submitted by an employer with more than one establishment in connection with only one establishment and, if he is claiming aid for more than one employee, than the claims must be submitted jointly.
   B) SZÉP card
Pursuant to Government Decree 140/2020 (IV.21.), the maximum annual amount of fringe benefits that can be granted in the form of the SZÉP Card has been raised for 2020 as follows:
a) sub-account for accommodation: up to HUF 400,000 (previously HUF 225,000);
b) sub-account for hospitality: up to HUF 265,000 (previously HUF 150,000);
c) sub-account for leisure opportunities: up to HUF 135,000 (previously HUF 75,000)
In addition to that, a further benefit for employers is that no social security tax has to be paid on transfers to the SZÉP card that are credited to the account of the employee between 22 April 2020 and 30 June 2020.
   C) Unpaid leave
Government Decree 140/2020 (IV. 21.) introduced a change with regard to the suspension of the legal relationship with the employees, and leave without pay. During unpaid leave, the employee’s insurance relationship is not suspended if the unpaid leave is taken due to the emergency situation. However, employers should be aware that in this case, the payment of the health service contribution is the responsibility of the employer under the government decree.