Need Croatian Government Aid in Coronavirus Era? The Criteria…

Lauren Simmonds

It is estimated that the Croatian Government will need to spend a massive five billion kuna to keep the proverbial ship afloat as coronavirus gives the domestic economy a beating.

As Poslovni Dnevnik writes on the 19th of March, 2020, businesses and companies that want or need Croatian Government assistance of 3,250 kuna per employee will have to meet a number of criteria and will only receive their first payments in April.

The Ministry of Labour has adopted the criteria and requests will be submitted from Monday onwards, with payments being made by April the 15th, 2020, at the absolute latest. As noted above, it is estimated that the state will need to spend as much as 5 billion kuna. 24sata exclusively learned about the criteria will need to be met in order to receive this particular payment from the state.

For employers who are in trouble owing to the outbreak, especially those who have had to close down their businesses and companies, this may be a long and arduous waiting game. It’s worth recalling the fact that the catering and hospitality industry is completely locked down except for those who supply food via delivery. Gyms, hairdressers and all other service activities other than those which deal with the sale of the basic necessities of life, such as food, medicine and hygiene, are all closed.

Everyone who has had their company ”imprisoned” by the decision of the Civil Protection Staff is entitled to financial support from the Croatian Government.

Those who receive support will have to keep hold of the employee for whom they’re applying for at least a month longer. Therefore, if a company has received support of 3250 kuna for a worker for a maximum of three months, they must not fire that employee for six months. If a company dismisses a worker during this period, then they should return the grant immediately.

A Croatian employer should pay the rest of the worker’s salary for the entire time, too. For example, if a worker has a net salary of 6500 kuna, the employer should provide another 3250 kuna of Croatian Government assistance for which they have applied on top of that sum. Contributions and the various taxes on this wage will not have to be paid by the employer for up to three months, but they will be re-introduced later on and the state doesn’t want to write off the need for those payments even though Croatian employers have requested it in significant numbers.

When it comes to those who are not ”detained” by coronavirus and the state’s lockdown decisions, in order to receive assistance, employers will have to prove a fall in their activity due to the pandemic in their application.

One of the conditions for Croatian Government financial support is that their business activity has dropped by 20 percent over the last year, which will require concrete proof and a statement. Difficulties which will be recognised for assistance include a decline in turnover, the cancellation of reservations and events, the cancellation of business contracts and orders, the inability to deliver completed goods and products or raw materials, and inability to order new raw materials and such for the continuation of work.

The employer will also need to indicate the activities he has undertaken in order to preserve employee jobs.

But that’s not all. Of course. There is also an employment criterion that needs to be readily met.

Employers who have experienced employee decline from the beginning of March to March the 20th, 2020, are also eligible for support. Furthermore, the criteria is narrowed down by company size. The support will not be given to micro-employers of up to ten workers, if more than 40 percent of those workers have been laid off by March the 20th.

A small company may not lay off more than 20 percent of its workers until March the 20th, a mid-size company may not lay of more than 15 percent of its workers, and a large company must not lat off more than 10 percent of its workers. This doesn’t include the normal expiry of contracts, a worker entering into legal retirement or if a worker has been fired for their behaviour.

All this also applies to full-time workers. If they are part-time employees, the criteria for the Croatian Government grants remain the exact same.

Make sure to follow our dedicated business section for more on Croatian companies. Stay up to date with our dedicated section for rolling information in English on coronavirus in Croatia.


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