A virus pandemic crisis COVID-19, which we are currently experiencing, has caused many entrepreneurs to wonder how to deal with the consequences of this event. Some entrepreneurs ask themselves if they can maintain the company. The government seems to be helping entrepreneurs.
Last Friday, the Sejm accepted the project Act dated 28 March 2020 amending the Act on Special Solutions for Prevention, Prevention and Control COVID-19, other infectious diseases and the resulting crisis situations and some other laws (hereinafter: crisis shield, bill), or so-called crisis shield.
After the Sejm rejected most of the amendments proposed by the Senate, the bill was passed for signature to the President. Andrzej Duda signed an anti-crisis shield on 31 March 2020 The analysis of its content raises the question – whether the proposed solutions bring real aid to entrepreneurs and who really can benefit from it.
The following are the most important solutions dedicated to entrepreneurs proposed by the government in the field of labour law and social security.
Exemption from the obligation to pay contributions to ZUS
In helping fight the effects of coronavirus pandemic COVID-19 Government in the Sejm adopted 28 March this year the crisis shield provided for the release of micro-enterprises which reported less than 10 insured persons as well as persons engaged in non-agricultural economic activities who pay contributions to their own insurance from contributions paid to the Social Insurance Institution, i.e.
unpaid contributions for compulsory pension and accident insurance, voluntary sickness insurance, health insurance, Labour Fund and Solidarity Fund.
It should be noted that the exemption is intended for businesses employing maximum 8 employees, since the number of persons reported for insurance should also be taken into account by the entrepreneur himself. Then 9 people reported for insurance, it's an entrepreneur plus eight employees.
The exemption in question cannot be used by an entrepreneur using the so-called start-up allowance. On the other hand, there seems to be no counter-indications that this form of aid should be used by entrepreneurs who are also employed, for example, on the basis of an employment contract.
In order to benefit from this aid, an application must be submitted to the Social Insurance Institution by the date of 30 June 2020
The exemption is to apply for a period 3 months, i.e. from 1 March 2020 up to day 31 May 2020 The exemption in question shall take place in the form of write-offs. In order to benefit from the exemption, certain conditions must be met.
By persons engaged in non-agricultural business activities which pay contributions for their own insurance, self-employed persons, representatives of liberal professions, creators, artists, shareholders of the Polish limited liability company. and shareholders of a public, limited or partner company should be understood. They also include those who run public or private schools or other forms of pre-school education.
A certain difficulty is to qualify for the appropriate category of shareholders of civil partnerships and partnerships (i.e. a public, partnership, limited partnership, limited partnership). While qualifying as an appropriate category of shareholders of the company in a situation where the company does not employ employees seems to be quite simple, the case is considerably complicated when the company employs employees (of course if it has reported for insurance no more than 9 persons).
However, it appears that the partners of a civil partnership or of a passenger company, who have so far paid social security contributions themselves (writing briefly from their own bank accounts) and have not been individually reported for insurance by the company, can benefit from the exemption.
After fulfilling certain conditions, of course. After first, when they started their business before 1 February 2020, a second when they achieved income for first the month to which the request for exemption is made, not more than 15,681 PLN (most often it will be the month of March 2020 – details below).
Partners of a civil partnership or of a passenger company which employs employees and which has been notified for insurance by that company may benefit from the exemption when the insurance is less than 10 insured (for example two partners and 7 employees). In this case, the income criterion is not applicable.
For self-employed first The criterion determining the possibility of benefiting from the exemption in question is an income criterion.
A self-employed person will have the right to apply for an exemption if his income from activities within the meaning of the personal income tax legislation obtained In the first the month for which the application for exemption from contributions is submitted was not higher than 300% forecast average monthly gross wage in the national economy In 2020 This means that an entrepreneur will be able to benefit from this exemption if his income does not exceed In March 2020 quotas 15,681 PLN.
Revenue should be understood as the total value obtained from the sale of goods, goods or net services (i.e. without VAT).
From the literal wording of the recipe Article 31zo. 1. It follows that the income criterion does not apply to entrepreneurs who have reported less than 10 insured.
These entrepreneurs will be exempted from the obligation to pay unpaid social security contributions, health insurance, the Labour Fund, the Solidarity Fund, the Guaranteed Workers' Benefits Fund or the Pension Fund, which are due for the period from the date of 1 March 2020 up to day 31 May 2020 Unfortunately, this position may raise doubts, and among the practitioners there are voices indicating a different interpretation of the provision – and that the income criterion should also apply to entrepreneurs submitting for insurance below 10 people.
The adoption of the absence of an income criterion for entrepreneurs is contrary to the objective of the Act, which is intended to support only entrepreneurs in difficulty, while the absence of this criterion leads to the conclusion that the aid offered can also be used by a successful entrepreneur who has not been affected by the effects of the pandemic.
However, the analysis of the content of the justification of the law leads to the conclusion that this position is incorrect and the income criterion does not apply to micro-entrepreneurs. It should be mentioned that there is still one Interpretative discrepancy – i.e.
the question arises whether the micro-entrepreneur is exempt from social security contributions which he pays for himself or only from those paid for employees. The answer to this question is not directly found in the rule or in the justification of the law.
However, given the objective of this exemption, namely to enable micro-entrepreneurs to maintain jobs, as well as the current position of the Social Security Office, it should be argued that the exemption concerns social security contributions paid for workers (maximum eight), as well as the entrepreneur himself.
Moreover, the position that, in order for a micro-entrepreneur to be exempt from the obligation to pay social security contributions for himself must fulfil the income criterion as for self-employed persons, should be considered to be incorrect.
The income criterion is extremely important and is subject to the control of the Social Security Office. Therefore, it should be borne in mind that care should be taken to determine the amount of revenue to be indicated in the application for exemption from contributions.
Upon receipt of an application for exemption from payment of contributions in electronic form, ZUS informs the Head of National Tax Administration of the amount of revenue shown in the application.
Subsequently, the Head of the National Tax Administration informs ZUS of the differences between the revenue shown in the application for exemption from payment of contributions and the revenue shown for tax purposes.
Where it is found that the discrepancies identified by the Head of the KAS are the result of misleading the Social Security Office, the payer of the contributions shall be obliged to pay the contributions for March, April 1 May 2020 with interest on delay, within the time limit 30 the days following receipt of the decision on the matter.
That decision shall be subject to appeal.
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second the criterion states that the entrepreneur applying for the above-mentioned exemption must be a contributor to the contributions filed before the day 1 February 2020 This means that the aid offered by the government will not be available to the entrepreneur who started business on the day 1 February 2020 And later.
Interestingly, clergymen who are contributors may also benefit from the exemption from the obligation to pay social security contributions.
A person conducting a non-agricultural activity and a person cooperating with him and a clergyman retains the right to social security benefits in the event of sickness and maternity if he was subject to sickness insurance on the day of 1 February 2020 Importantly, information on the pension contributions of persons operating non-agricultural activities and persons cooperating with them and clergy, exempt from the obligation to pay them, is recorded on the insured account as a contribution paid. In addition, in the case of non-agricultural persons and persons associated with them and clergy, where the provisions make the law or the amount of social security benefits dependent on the payment of contributions, social security contributions exempt from the obligation to pay them shall also be treated as contributions paid.
It should also be borne in mind that, in the case of a person carrying out non-agricultural activities, a person cooperating with him or her and a spiritual person, the payment of contributions established on the lowest basis for the assessment of those contributions is exempt. This also applies to the person performing work on the basis of an agency contract, an order contract, another service contract to which the rules on the contract and the person cooperating with it apply under the Civil Code, for which the amount declared is based.
In order to benefit from this aid, an application must be submitted to the Social Insurance Institution by the date of 30 June 2020 Until then, the payer must also send the settlement declarations or roll-over reports for March, April 1 May 2020, because it is a condition of dismissal. This obligation shall not apply to persons exempt from the above documents.
The Social Insurance Institution shall exempt from the obligation to pay contributions within a period of no more than 30 days from the date on which the statement of account or the name of the monthly reports due for the last month indicated in the application for exemption from payment of contributions is sent and, where the payer of contributions is exempted from the obligation to submit them, within no more than 30 the days from the date on which the contribution for the last month indicated in the application for exemption from contributions should be paid. This means that the applicant should know about the ZUS decision at the latest 31 July 2020
Refusal of exemption from the obligation to pay contributions shall be made by decision. The payer of contributions shall have the right to apply to the President of the Plant for reconsideration on the basis of the decision taken. In the first an instance by the minister.
Emergency shield in the recipe Article 31zz The Act also introduces an exemption from the payment of pension contributions for second quarter 2020 This exemption applies to persons covered by pension insurance within the meaning of Act dated 20 December 1990 on the social insurance of farmers. These persons will be financed by the State budget through the Agricultural Social Insurance Fund for this period.
Compensation for staff salary in case of interruption or reduced working time
Another solution proposed in the crisis shield is the possibility for the entrepreneur to obtain a decrease in economic turnover following the occurrence of COVID-19 payments to staff in the event of interruption or reduced working time. These payments may also be granted to the remuneration of persons employed on a basis other than a contract of employment.
The decline in turnover will be calculated in two ways. After first, decrease not less than 15% is calculated as the ratio of total turnover following the occurrence of COVID 19 Within two consecutive months in the period after 1 January this year, to the total turnover from the corresponding two months from last year. After second decrease not less than by 25% is calculated as the ratio of the total turnover over any month in the period after 1 January this year, compared to turnover from the previous month.
Due to the decline in economic turnover related to coronavirus, the worker subject to economic downtime will be paid at least a minimum wage. The employer, in turn, will receive the State's contribution to the remuneration of 50% minimum remuneration (i.e. 1,300 PLN).
The employer will also receive the equivalent of social security contributions. However, an entrepreneur who reduces the working time due to a decrease in economic turnover may reduce the working time of an employee by 20%, no more than part-time. There is a reservation here that the wage must not be lower than the minimum wage.
In such a situation, the State will finance a maximum amount up to 40% average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office (i.e. up to amount 2,079.43 PLN). In this case, the entrepreneur will also receive the equivalent of social security contributions.
However, aid will not be granted to workers who have earned more than 300% forecast remuneration for 2020 (15,681 PLN). Aid shall be granted for a period of economic downtime or reduced working time, for a period of no longer than 3 the months following the date of application. This period may be extended by a further period 3 months under the decree of the Council of Ministers.
Entrepreneur in question Under section 1, must meet the criteria in question under Article 3(1)(2) and 3 Act dated 11 October 2013 special solutions for job protection (Journal of Laws of 2019, item 669), subject to the fact that it is not covered by tax liability, social security contributions, health insurance, the Guaranteed Workers' Benefits Fund, the Labour Fund or the Solidarity Fund to the end third quarter 2019 An entrepreneur may receive assistance from the Guaranteed Workers' Benefits Fund only if he has not received assistance from the same employees in respect of the same payment titles for job protection.
In order to obtain the aid, an agreement will have to be concluded with trade unions or employee representatives (if there is no association). In the event of problems with the selection of representatives (e.g. due to absenteeism, remote work) it will be possible to communicate with the representations selected for other purposes, e.g.
the introduction of the occupational social benefit fund rules. Companies will be required to forward a copy of the agreement to the State Labour Inspection within the time limit 5 days from the date of conclusion of the agreement.
An important part of this form of aid is the absence of any amending notices. This means that the determination of conditions and modes of work during the period of economic downtime or reduced working time does not require for its effectiveness a change of notice. Under Article 42(1-3) Work code.
Applications for payment of such benefits may be submitted electronically to the directors of the Provincial Labour Offices.
Parking benefit
Another form of aid offered by the government is the one-time payment of the so-called parking benefit.
The benefit is granted to a person carrying on non-agricultural business activities under the rules Act dated 6 March 2018 – The right of traders or other special provisions and the person executing the agency contract, the contract of order, another service contract to which, pursuant to Act dated 23 April 1964 – The Civil Code shall apply either the order or the work contract.
They may benefit from a parking allowance provided that they are not subject to social insurance for another reason. This means that the person employed, for example under the contract, and at the same time on the basis of the contract of employment cannot benefit from the power in question.
Similarly, a single-person economic activity and at the same time employed, for example, on the basis of an employment contract, will not be able to obtain a parking benefit. On the other hand, this form of support for entrepreneurs can be used by people using the so-called start-up relief.
Parking benefits are granted to persons residing in the territory of the Republic of Poland, i.e.
not only citizens of the Republic of Poland, but also persons having the right of residence or permanent residence in the territory of the Republic of Poland who are nationals of the Member States of the European Union, the Member States of the European Free Trade Agreement (EFTA) – parties to an agreement on the European Economic Area or the Swiss Confederation.
Furthermore, the benefit is granted to foreigners legally residing in the territory of Poland.
A parking benefit shall be granted where, following the occurrence of the COVID-19 there has been a downtime in the conduct of business by, respectively, the person conducting non-agricultural business activity or by the principal or the contracting authority with whom the civil law contract was concluded.
The Act introduces certain restrictions on the possibility of persons engaged in non-agricultural business to benefit from this benefit. In addition, the situation of people who have suspended their business activity is somewhat different from those who have not yet decided to do so.
Entrepreneurs who have not suspended their activities will be entitled to benefit if their operating income in relation to the previous month has fallen by at least 15% and was not higher than 300%. the average monthly remuneration from the previous quarter, announced by the CSO, applicable at the date of the application (i.e.
income In March 2020 will not be higher than 15,595 PLN at least 15% lower than In February 2020).
However, entrepreneurs who suspended their activities after 31 January 2020, may benefit from a parking benefit if their operating income (earned in the month preceding the month in which the application for a parking benefit was lodged) is not higher than 300% the average monthly remuneration from the previous quarter, announced by the CSO, applicable at the date of the application (i.e.
15,595 PLN).
On the other hand, a person exercising a civil law contract shall be entitled to a parking benefit if the civil law contract was concluded before the date 1 February 2020, and the income from the civil law contract within the meaning of the provisions on personal income tax obtained in the month preceding the month in which the application for a parking benefit was lodged was not higher than 300% the average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office on the basis of the provisions on pensions and pensions from the Social Insurance Fund applicable on the date of application.
Parking benefit is due in the amount 80% the amount of the minimum salary for work determined under the minimum wage provisions applicable In 2020 i.e. Amount 2,080 PLN. This benefit is free of any public liability.
Where the sum of revenue from civil law contracts within the meaning of the rules on personal income tax obtained in the month preceding the month in which the application for a parking benefit was lodged is less than 50% the amount of minimum remuneration for the work in force In 2020 the parking benefit is equal to the sum of the remuneration for the performance of these civil law contracts.
Operators of economic activities for which flat-rate income tax rules are applicable in the form of a tax card and who have benefited from the exemption of sales on the basis of the tax on goods and services Article 113(1)(9) VAT Act, will have the right to a parking benefit of 50% the lowest remuneration applicable In 2020 i.e. 1,300 PLN. Such a regulation has been introduced in the absence of the possibility of verification of revenue.
Please note that in the event of a coincidence of rights to more than one parking benefit is due one parking. At this point it is also worth to ask whether an entrepreneur can benefit at the same time from the exemption from the obligation to pay social security contributions referred to in point I above and obtain a parking benefit.
On the basis of the Act under consideration, there are no obstacles for an entrepreneur fulfilling the conditions for receiving aid in the form of both an exemption from the ZUS and the provision of a parking benefit to benefit from both proposed solutions.
Although the government in the previous draft bill introduced such a restriction, it has now withdrawn from it.
Of course, the right to a parking benefit is determined at the request of the person entitled to the Social Insurance Institution. In the case of a person executing a civil contract, the application shall be made through the payer or the contracting authority respectively. Parking applications may be lodged with the Social Security Office at the latest within the time limit 3 months from the month in which the declared outbreak was lifted.
In view of the duration of the epidemic or epidemic situation and the effects caused by them by the Council of Ministers may, with a view to combating COVID-19, by means of a Regulation, grant repayment of the parking benefit to persons who have received that benefit. This means that the entrepreneur can even benefit from the parking benefit twice.
The provisions of the Act do not specify when exactly the payment of the parking benefit will take place. According to Article 15zu. 1. The Act of the Social Insurance Institution pays the parking benefit immediately after the last circumstances necessary for granting it have been clarified.
Payment shall be made to the payment account of the authorised person maintained in the country or issued in the country of payment instrument within the meaning of Act dated 19 August 2011 on payment services (Journal of Laws of 2019, items 659, 130, 1495). Importantly, parking benefits are not deducted or executed.
In the event of refusal of the right to a parking benefit, the economic operator may lodge an appeal with the competent court within the time limit and in accordance with the rules laid down in the legislation. Act dated 17 November 1964 – Code of Civil Procedure (Journal of Laws of 2019, item 1460, as amended[10])) for social security proceedings.
The anti-crisis shield provides for the possibility for the relevant prime minister, on the basis of the contract concluded, to grant part of the wage costs of the employees and the social security contributions due on the basis of a fall in economic turnover following the occurrence of a COVID-19
A person who has unduly collected a parking benefit shall be liable to reimbursement, together with statutory interest for delay, in the amount and on the basis of the provisions of civil law. The Act defines what is to be understood by an unduly collected parking benefit.
This is primarily a benefit granted or paid on the basis of false statements or documents or in other cases of deliberate misleading by the person receiving the benefit or by the payer or the contracting person, respectively, and paid to a person other than the rightholder, for reasons independent of the Social Insurance Institution.
Financing in the event of a decrease in turnover
The anti-crisis shield provides for the possibility for the relevant prime minister, on the basis of the contract concluded, to grant part of the wage costs of the employees and the social security contributions due on the basis of a fall in economic turnover following the occurrence of a COVID-19. Importantly, this form of aid can be used by entities with no basis to apply for bankruptcy, as well as those which do not fall behind in the regulation of tax obligations, social security contributions, health insurance, the Guaranteed Workers' Benefits Fund, the Labour Fund or the Solidarity Fund to the end third quarter 2019
It is worth noting that the co-financing of part of staff's wage costs also includes the remuneration of persons employed on the basis of an insurrection contract or contract of order or other service contract to which according to Act dated 23 April 1964 – The Civil Code shall apply to orders or which carry out gainful work on the basis other than the employment relationship for an employer who is an agricultural production cooperative or other cooperative engaged in agricultural production if, for this reason, it is subject to insurance obligations: pensions and pensions, except for domestic assistance employed by a natural person.
The amount of support depends on the economic turnover decline shown.
In case of a decrease in turnover by at least 30% – The grant may be granted up to a total amount not exceeding 50% the remuneration of individual employees covered by the application for co-financing together with social security contributions due from those salaries, but not more than 50% the amount of minimum remuneration for work within the meaning of Act dated 10 October 2002 with a minimum salary for work plus social contributions from the employer for each employee.
In case of a decrease in turnover by at least 50% –The grant may be granted up to a total amount not exceeding 70% the remuneration of individual employees covered by the application for co-financing together with social security contributions due from those salaries, but not more than 70% the amount of the minimum salary, plus social contributions from the employer, for each employee.
On the other hand, if the turnover falls by at least 80% – The grant may be granted up to a total amount not exceeding 90% the remuneration of individual employees covered by the application for co-financing together with social security contributions due from those salaries, but not more than 90% the amount of the minimum salary, plus social contributions from the employer, for each employee.
This means that an entrepreneur can receive a minimum amount of funding 1,300 PLN per employee and maximum amount 2,340 PLN with social contributions due from these salaries
The grant in question may be granted from the date on which the application is lodged for a period of no longer than 3 months. As in the case of a parking benefit, with regard to the duration and effects of an epidemic or epidemic, it is possible to extend the period for which the grant is granted under the Regulation of the Council of Ministers.
The grant shall be paid in monthly periods, after the entrepreneur has made a declaration of the employment of the contract staff in a given month and the remuneration costs of each of these employees and the social security contributions due on that salary, as at the last day of the month for which the grant is paid.
Importantly, the recipient undertaking is obliged to keep the employees covered by the contract in employment for a period of time and, after completion of the grant, for a period equal to that period, i.e. for at least 6 months. In the event of failure to comply with this condition, the entrepreneur will be required to reimburse the grant without interest, in proportion to the period of non-employment of the employee, within the time limit 30 days from the date of service of the call from the governor.
In order to obtain funding, an application must be submitted to the Regional Labour Office competent for the purpose of its seat or place of work by the employees within the time limit 14 days from the date of the appointment by the district director of the Labour Office.
A similar solution was foreseen by the Government for an entrepreneur who is a non-employed individual. Such an entity may obtain funding for part of the business costs in the event of a drop in economic turnover following the occurrence of COVID-19.
Please note that the finalisation of the misuse of the use is refundable, without interest, within the time limit 30 days from the date of service of the call from the governor. Furthermore, an entrepreneur cannot receive funding in part where the same business costs have been or will be financed by other public funds.
Loans to micro-entrepreneurs
To counter negative effects COVID-19 The government introduces the possibility for the old man, on the basis of a contract from the Labour Fund, to grant a one-off loan to cover the current business costs of a micro-entrepreneur who carried out business before the day 1 March 2020
The application for a micro-entrepreneur loan shall be submitted to the Regional Labour Office, competent for the place of business, after the Director of the Regional Labour Office has announced his recruitment. In the application for a loan, a micro-entrepreneur declares the state of employment on the day 29 February 2020 on a full-time basis.
The loan may be granted up to the amount 5,000 PLN. The interest rate on the loan is fixed and is annual 0.05 rediscount rates accepted by the National Bank of Poland. The loan repayment period may not exceed 12 months, with penalty for repayment of capital and interest over the period 3 months from the date of granting the loan. At the same time, this loan may be extended by regulation of the Council of Ministers with a view to the duration and effects of an outbreak or epidemic.
The loan plus interest at the request of the micro-entrepreneur shall be decommissioned, provided that the micro-entrepreneur over the period 3 months from the date of its granting shall not reduce the employment rate on a full-time basis compared to the employment rate on a daily basis. 29 February 2020 In the request for decommitment, the micro-entrepreneur declares not to reduce employment.
The form of collateral for the repayment of the loan is a blank own account or other form of collateral established by the parties to the contract.
An interesting issue in the context of this regulation is whether self-employed people can benefit from a non-refundable loan. It is not clear from the provision of the Act that the possibility of using a loan applies only to micro-entrepreneurs employing employees.
Thus, it seems that the self-employed can also benefit from this form of assistance, while assuming that they will probably not be able to benefit from redemption. Unless you can push through the position that the self-employed kept his own job. Time will tell.
The solutions discussed above are only part of the proposals in the crisis shield. However, in our view, they are the most important solutions for entrepreneurs, especially from an economic point of view.