Starting from 1 March 2022, the so-called first aid for companies will be replaced by a permanent Kurzarbeit scheme. The new system applies to companies with employees but excludes self-employed persons and the so-called one-person companies (financial assistance for them is still pending).

In addition to disasters and emergencies, the law also enables assistance for business risks

In the event that the employer has no work for the employee due to external impact and the employee is forced to stay at home, he/she will receive wage compensation of at least 80% of his/her average earnings. At the same time, an employer who qualifies for a state subsidy will receive financial support equal to 60% of the employee's average earnings. This means that companies will have to cover only the remaining one-fifth of the salary from their own resources.

The support scheme covers a government-declared emergency (e.g., a pandemic), a state of emergency/state of distress declared by the President (e.g., in times of war), a government-declared emergency (i.e., a year-on-year decline of at least 3% in annual GDP) or cases of force majeure (e.g., flood, fire, shortage of materials due to an accident, etc.). However, situations in which a firm would be eligible for support from the Kurzarbeit scheme would also include economic difficulties endured by businesses, for example, in the event of a shortfall in production supplies. All of these situations will classify as 'limitations on the employer's activity' and will give rise to a claim for wage compensation. Financial support is introduced by Act No 215/2021 Coll. on support for shortened working hours.

An expert describes the introduction of the kurzarbeit scheme as a step in the right direction, however, she critically comments on the fact that the scheme will also cover companies' business risks. "Kurzarbeit should be a tool for cases of emergency, for example, disasters with an impact on the economy of a country, a region or a specific sector. Examples of situations in which it is important to help businesses with an across-the-board support scheme include exceptional situations such as a pandemic with a mandatory lockdown but also, for example, a power grid blackout, a tornado, or floods. However, in no case should Kurzarbeit be a tool to address economic difficulties of companies".

The expert continues that the key point is that (Kurzarbeit) should be a targeted instrument in the hands of the government and not a system that will subsidize companies whenever they face a business risk. "It is not right that the Kurzarbeit scheme should cover business risks. For example, the risk of supply failure of spare parts or raw materials for production and other similar risks should be borne by the company only. As defined by the law, Kurzarbeit is set up too generously, as it also covers business difficulties, and, at the same time, it introduces overly restrictive limits on the amount of aid provided. The system should be set up so that in the event of a disaster, the employee receives 80% of his/her real average income over the last 12 months with the government contributing 60% of the wage to the company."

State subsidy

• The amount of the state subsidy per employee is 60% of the employee’s average hourly earnings in the calendar month for which the support is granted.
• However, the amount of the state subsidy is a maximum of 60 % of 1/174 twice the average wage of the employee in Slovakia published by the Statistical Office of the Slovak Republic for the calendar year which precedes the calendar year in which the support is provided.
• The maximum amount of the state subsidy for one hour of obstacles at work in 2022 will be 60 % of 1/174 x 2 x EUR 1 133 = 60 % of EUR 13.0230 = EUR 7.8138.
• The state subsidy is granted for a total of a maximum of 6 months in 24 consecutive months. The SK government may extend this period based on government regulation.

Example low-paid employee:

During the month of March 2022, the employee had a total of 110 hours of obstacles at work due to the restriction of the employer's activities during the abbreviated work.
The average hourly earnings of an employee for the 4th quarter of 2021 is EUR 5/hour.
State subsidy = 60 % x average hourly earnings x number of obstacle hours = 60 % x EUR 5 x 110 hours = EUR 330

Example high-income employee:

During the month of March 2022, the employee had a total of 110 hours of obstacles at work due to the restriction of the employer's activities during the abbreviated work.
The average hourly earnings of an employee for the 4th quarter of 2021 is EUR 14/hour.
State subsidy = 60 % x average hourly earnings x number of obstacle hours = 60 % x EUR 12 = EUR 8.40.
In this case, the state subsidy must be calculated from the maximum amount, i.e. EUR 7.8138 x 110 hours = EUR 859.52