Friday, June 19, 2020
The new law regulating that, between 15.06.2020 and 31.07.2020, the State will cover 60% of the amount of the insurance contributions corresponding to the hours the employees submitted under the Synergasia labor scheme are not working, has now been officially published (article 16 of Law 4693/2020).
Moreover, Joint Ministerial Decision B’/2274/14-06-2020 was issued, providing for a detailed regulation of the complete framework of “Syn-ergasia” labor mechanism. It is reminded that this mechanism is introduced in order to support businesses and employees during the COVID-19 crisis and to safeguard the maintenance of full-time working positions in the private sector. The application period of the scheme is 15.06.2020 until 15.10.2020 (except for businesses with specific Activity Code Numbers, related to the aviation sector, such as air transportation, aircraft maintenance etc., which may participate in this mechanism for a more extended time period, ending on 31.12.2020).
Businesses entitled to benefit from this scheme may reduce up to 50% the working time of their full-time employees, either seasonal or not, who hold a contract of dependent employment on the 30th May 2020 (date of publication of law 4690/2020). This scheme does not apply to part-time employees, employees of the public sector and employees whose contracts have been suspended.
The reduction of working time may concern either a part or even the total of each employer’s workforce, while employers may make use of this scheme for one or more months during the enforcement period, as mentioned above. As far as employees submitted under this mechanism are concerned, employers are restricted from terminate them or amend their contract’s terms and conditions.
During the period of submission of employees under this scheme, employers are restricted from terminate such employees or amend their contract’s terms and conditions, nor change the amount of their nominal wages. Any termination shall be considered null and void.
During the period of use of this scheme, the state will cover 60% of the amount of the employee’s salary that corresponds to the working time reduction, while the employee’s amount of net earnings shall not fall under the minimum wage limit, as currently set by Greek legislation, otherwise the State shall cover the amount required to complete the minimum wage limit of the reduced employee. As to the annual leave bonus and the Christmas bonus for the year 2020, these will be analogically distributed to the employees entitled, calculated on the 60% of their reduced working time.
The mechanism is addressed to all businesses, either seasonal or all-year operating, regardless their Activity Code Number (ΚΑΔ), under the following conditions:
a. Businesses obliged to submit VAT Periodic Statement, they shall prove at least 20% reduction of turnover in comparison with the turnover they had during the reference period, depending on the month of entering the mechanism.
Month of entering the mechanism: Losses showed in months
• June 2020: at least 20% turnover loss deriving from March and April 2020 (cumulatively calculated)
• July 2020: at least 20% turnover loss deriving from March - April - May 2020 (cumulatively calculated)
• August – September 2020: at least 20% turnover loss deriving from March - April – May – June 2020 (cumulatively calculated)
-> It is noted that the reference period and the way of calculation of the turnover losses is different for businesses which use a double-entry accounting system and businesses using a single-entry accounting system, according to the respective tables as provided in the Joint Ministerial Decision in question (article 5a).
b. Businesses not obliged to submit VAT statement or relieved from this tax obligation, shall prove at least 20% reduction of gross earnings in comparison with the amount of gross earnings they had during the reference period, as follows:
Month of entering the mechanism: Losses showed in months
• June 2020: at least 20% gross earnings loss deriving from March and April 2020 (cumulatively calculated)
• July 2020: at least 20% gross earnings loss deriving from March - April - May 2020 (cumulatively calculated)
• August – September 2020: at least 20% gross earnings loss deriving from March - April – May – June 2020 (cumulatively calculated)
In this category of businesses, the reference period includes the gross earnings of the year 2019, divided by six (6) in case of entering the mechanism in June, by four (4) for entering the mechanism in July and by three (3) for entering the mechanism in August – September (please refer to the relevant table as provided in article 5b of the Joint Ministerial Decision in question).
Process to be followed by interested businesses
In order to benefit from this mechanism, the interested businesses and employers shall adhere to the following procedure:
I. Submission of solemn declaration to the Independent Authority for Public Revenue (ΑΑΔΕ)
- Businesses are required to submit a solemn declaration via the electronic platform MyBusinessSupport of the Independent Authority for Public Revenue (ΑΑΔΕ), stating their gross earnings in comparison with the reference period, depending on the month of entering the Synergasia mechanism.
- The declared economic data are then cross-examined with the economic data which corresponded to the reference period, by the ΑΑΔΕ electronic system, confirming or rejecting access of the businesses – applicants to the mechanism.
- Businesses which were rejected from having access to the mechanism, shall pay their employees in full.
II. Submission of solemn declaration to ERGANI labor authority
Businesses shall submit a solemn declaration/petition, stating the following data:
a. information of their business (company name, Tax Identification Number etc.)
b. the month of entering the mechanism, along with the category to which the business belongs to (obliged or relieved from submitting VAT statements etc.)
c. The employees who hold on 30.05.2020 a full-time contract of dependent employment and the business wished to submit them under the Synergasia scheme
d. If a petition includes suspended employees, it is automatically considered that suspension is permanently recalled and, thus, the employee returns to work under the Synergasia regime
e. The normal weekly working timetable of the employees entering the mechanism
f. The reduced working timetable for each employee entering the mechanism, which may be declared for one or more weeks within the month.
In any case, employers shall declare any and all changes related to the organization of working time of their business, including the changes made in accordance with the Synergasia mechanism, to ERGANI, by filling in the Special Form no 4.
Businesses shall submit to ERGANI a solemn declaration, within the first three (3) days of each next month, stating the following:
a. The monthly gross and the net earnings of their full-time employees –to-enter the mechanism
b. The salary actually paid to the employees for the month of entering the mechanism, according to the reduced working time
c. The employees’ IBAN and the name of the banking institutions where the payroll bank account is held.
The 60% of the of the amount of the employee’s salary that corresponds to the working time reduction is paid by the State within the first ten (10) days of the following month after application of the mechanism. It is noted that regular checks by the competent labor authorities will take place in businesses and employers in order to safeguard proper application of the provisions as set out regarding Synergasia mechanism.