[Czech Republic] Forgiveness of social insurance for small employers
On June 30th, 2020, a new law was published in the Collection of Laws that forgives social insurance for periods from June to August 2020, which an employer is obliged to pay for its employees.
It is only a waiver of social insurance, not health insurance. According to the law’s wording, there is no need to submit any application, the employer must correctly evaluate whether the entitlement to a waiver (reduction) of the insurance arises and will have to make this reduction himself. State institutions will be able to verify the fulfillment of certain conditions themselves. The final inspection should be performed as part of a standard inspection by the Czech Social Security Office, which takes place regularly approximately every 3 years.
Basic conditions of waiver/reduction of insurance:
- the number of employed employees participating in sickness insurance does not exceed 50 on the last day of the month
- this number must represent at least 90% of the same number as of 31.3.2020
- the assessment base for all employees for a given month represents at least 90% of the assessment base for the month of March 2020
- the employer paid insurance for employees for the given month within the due date
- the employer does not participate in the Antivirus program for the given month
In addition, employers listed in § 109 par. 3 of the Labor Code (government entities, territorial units etc.), employers, who are not tax residents of the Czech Republic or another EEA state as of 1 June 2020, and health care providers who draw other compensation in connection with COVID-19 are excluded from this help.
Furthermore, the reduction for each employee is limited to the assessment base of 52.253 CZK. Insurance from the assessment base exceeding this limit must be paid by the employer. Insurance may not be reduced for employees who have been dismissed for a reason in § 52 a) - c) of the Labor Code or for employees whose employment did not last on the last day of the given month.
The Czech Social Security Office will prepare a new overview of paid social insurance, which the employer will mark the reduction of insurance on.