Month: April 2020

Reduction in working hours due to the COVID-19 epidemic

Posted on April 22, 2020

The Act on special solutions related to preventing, preventing and combating COVID-19, other infectious diseases and crisis situations caused by them (Journal of Laws of 2020, item 374 as amended (hereinafter referred to as “Tarcza”)), passed on 31 March 2020, introduces a number of legal solutions – in many areas of social life. Most of them are aimed at supporting Polish entrepreneurs to cope with the difficult situation caused by numerous sanitary restrictions during a pandemic.

As a consequence of the reduction of working hours, the employee’s remuneration may not be lower than the minimum wage for work including working hours.

The adopted regulation is not particularly extensive. Nevertheless, it may raise questions of interpretation. First of all, they arise as to whether the possibility of reducing working hours applies to all employees – regardless of their working hours.

Looking at the provisions of Tarcza, the position should be taken that the special entitlement contained in Article 15g(8) will be applied only to those employees who are employed more than 0.5 full-time. In other words, employees who are employed on 0.5 or less hours cannot be covered by the 20% reduction. In their case, in order to reduce working hours, there would be a need to apply individual notice of termination of the employee’s working and pay conditions by submitting an appropriate notice of change.

The impossibility of covering all employees with a 20% reduction in working time will result from the literal wording of the Tarcza regulations. Since it is possible to reduce an employee’s working time to a maximum of 0.5 hours, as evidenced by the provision “no more than 0.5 hours”, under no circumstances can an employee, who already has such a working time, “go down” below this level. This would go beyond the Tarcza’s ban, which expressly prohibits working hours from falling below 0.5 hours. This conclusion is certainly not altered by the final part of Article 15g(8) of the Tarcza which states that working time must be taken into account. It concerns the issue of remuneration for work due to the employee and not the proportional reduction of time itself. Therefore, it can be said that when adopting the Tarcza, it was decided to include in its provisions only those employees who are a more significant financial burden for the employer.

A separate issue remains the matter of remuneration for the work of an employee due to him/her as a result of a 20% reduction in the working time in accordance with the Tarcza Provisions.

In simple terms, it can be said that as a result of a 20% reduction in working time, an employee will retain the right to a 20% lesser salary – according to the new working time. If an employee was paid the minimum salary when full-time, as a result of the Tarcza, he or she will now have 80% of his or her working time – the same as his or her previous salary. In other words, he should receive 80% of the minimum salary for work. This is because the legislator has indicated that “the salary cannot be lower than the minimum wage for work (…), including the working hours”. Taking into account the working time indicates this. An employee receives from the employer a minimum amount of time, as it results from the regulations, taking into account that he has to devote 20% less time to work, for which he must be entitled to 20% less remuneration.

Changes in PIT and CIT regulations

Posted on April 17, 2020

On 31 March 2020 the amendments to the Act of 2 March 2020 on special solutions related to preventing, preventing and combating COVID-19 came into force. Below we present the most important changes in the PIT (Personal Income Tax) and CIT (Corporation Income Tax) regulations.

Settlement of tax losses in PIT and CIT

The amendments to the Actintroduces a mechanism, previously unknown in the Polish legal system, allowing for the deduction of a loss incurred in 2020 from income obtained in 2019 in the area of CIT and PIT. However, the deduction will be possible only up to PLN 5 million of the loss and will apply, as a rule, only to those taxpayers who will obtain in 2020 revenues at least 50% lower than those obtained in 2019.

Extension of the deadline for filing the annual PIT and CIT returns

The deadline for filing the annual PIT (PIT-36 i PIT-36L) and CIT-8 returns and for paying the tax due was postponed to 31 May 2020. This means that submission of the return for 2019 after 30 April 2020 will not have negative consequences, assuming that the proper return is submitted by the end of May this year.

Postponement of PIT payment deadline

The amendments provide for the possibility of postponing the date of payment by payers of personal income tax on salaries paid in March and April 2020 until 1 June 2020.

Abandonment of the simplified form of advance payment

Mail entrepreneurs who decided to pay PIT and CIT advances in a simplified form will be able to resign from simplified advances for the period March-December 2020 and calculate monthly advances on current income on general terms.

Amendments to the Code of Commercial Companies

Posted on April 15, 2020

The amended law on counteracting the spread of COVID-19 (hereinafter referred to as “Special Act”) makes changes to the Polish Commercial Companies Code. The amended provisions concern, among others, remote functioning of companies.

Remote meetings of Management and Supervisory Boards

The amendment to the Commercial Companies Code has directly introduced the basis for holding meetings of the management and supervisory boards of companies by means of direct remote communication (Internet) and adopting resolutions in writing, remotely or in writing through another member of the body.

The provisions that prevent the written or remote adoption of decisions concerning the election of the chairman and vice-chairman of the supervisory board, the appointment and dismissal of members of the management board and the suspension of these persons from their duties have also been repealed.

Voting in writing through another member of the Management Board shall consist in a written communication by a member of the Management Board absent from the meeting on the basis of the agenda provided for in the notice entitling another member of the Management Board to cast a vote on his behalf. Therefore, voting in this manner on resolutions not included in the agenda indicated in the invitation is not allowed.

Meetings of shareholders in capital companies

Meetings of shareholders may also be held by means of electronic communication.

In order to hold a meeting in which shareholders will be able to participate by electronic means of communication, it must be convened in advance at a specific time and place. The possibility of remote participation in the meeting shall be announced by the chairman in the invitation. It is up to the convener to allow the possibility of a remote meeting.

The notices convening the shareholders’ meeting should contain information about the possibility of participating in the meeting by electronic means of communication, as well as information about the manner of using such solutions and the manner in which the shareholder will be able to exercise his voting right and to lodge a possible objection to the resolutions covered by the meeting.

Suspension of administrative deadlines due to the COVID-19 epidemic

Posted on April 9, 2020

Under the terms of the Law on Counteracting the spread of COVID-19 (hereinafter referred to as “Special Act”’), during the period in which an epidemic emergency or state of epidemic is in force, the time limits for administrative court proceedings and administrative proceedings do not start and are suspended for that period.

Suspended are:

Time limits on which legal protection in court or authority is dependent;

Time limits for a party to perform actions shaping its rights and obligations;

The statute of limitations;

Time limits, the failure to comply with which results in the expiry or modification of rights in rem and claims and receivables, as well as falling into delay;

Final dates, the failure to comply with which is subject to adverse consequences for the party;

The entities or organizational units subject to registration in the relevant register to perform activities which give rise to the obligation to report to that register, as well as time limits for the entities to perform their obligations under the regulations on their system.

Examples of such terms are those set out in the Code of Administrative Procedure or in the Law on Proceedings before Administrative Courts:

Applicable party to the proceedings:

7-day period for submitting a complaint
14 day period for submitting an appeal
30-day period for submitting a complaint to the administrative court

The time limits applicable to public administration bodies for the consideration of cases:

In the case of cases requiring investigation, one month from the date of initiation of the procedure
In the case of particularly complex cases requiring an investigation, no later than two months from the date of initiation of the procedure
In case of appeal proceedings – one month from the date of receipt of the appeal

Failure to deal with cases involving the suspension of deadlines

In connection with the suspension of the application of the provisions governing the time limits to be observed by the parties and offices, we may encounter significant difficulties in obtaining a court decision or administrative decision. At the same time, the parties have lost the opportunity to assert their rights for inaction or protraction and the right to hear the case without undue delay.

These regulations may suspend any action in proceedings conducted by administrative offices and courts. Letters, motions, complaints, etc. submitted by the parties or participants to the proceedings during an emergency or epidemic may remain unrecognized and public administration bodies will not suffer negative consequences as a result.

A quicker resolution depending on the will of the authority

The Special Act provides that the activities performed during the period of suspension of the commencement or suspension of the running of deadlines are effective. This means that courts and offices may continue their work in practice.

A party or participants to the proceedings are obliged to perform actions specified in the demand if failure to perform the action could cause a threat to life or health, serious damage to the public interest or threaten irreparable material damage, this also applies to public administration bodies, which have been asked to take a stand on the subject matter of the proceedings. A party may also voluntarily comply with an obligation imposed, even if the time limit for compliance does not run.

Consequently, ex-officio may be issued:

Decisions wholly in response to a request from a party or participant in proceedings,

Certificates of no grounds for objection.

An example of a decision that fully complies with a party’s or participant’s request is the following:

Decision on authorisation of use

Decision to transfer the building permit

A party may appeal against an administrative decision. The decision shall not be enforced before the expiry of the time limit for appeal. However, if it complies with the request of all parties, it shall be enforceable before the expiry of that period. It may also be considered to obtain a declaration from all parties/parties to the proceedings waiving the right to appeal the decision (action).

Thus, there are no obstacles to the parties’ requests being dealt with.

Facilitations in the field of social security in connection with the COVID-19 epidemic

Posted on April 7, 2020

The COVID-19 epidemic has put many companies in a very difficult situation. The loss of income and reduced demand for products and services has negatively affected the financial situation of businesses. In addition, the loss of financial liquidity makes it impossible to pay current social security contributions.

ZUS has declared assistance and prepared facilitations for companies operating in a difficult situation.

Payment in instalments and deferral of ZUS payments

If, due to the coronavirus epidemic, an entrepreneur has encountered problems with:

payment of current contributions to ZUS, or
same problems have arisen in a person running a business, who has concluded an agreement with ZUS to spread the debt to ZUS into instalments or an agreement to postpone the payment of contributions,

he may benefit from simplified forms of aid:

deferral of the date of payment of ZUS contributions by 3 months (for the period from February to April 2020),

extension of the deadline for repayment in instalments by 3 months (in cases where the deadline for payment was set between March and May 2020).

To receive the relief for entrepreneurs, you must fill in the application form available on the ZUS website (link)

The application should be sent using the PUE ZUS portal, submitted in a box available in ZUS offices or sent by post.

The application must indicate how the COVID-19 outbreak has affected the financial situation of the undertaking and that this situation makes it impossible to pay the fees on time.

ZUS emphasises that submitting an application does not ensure that the relief is granted.

If the application is successful, a contract will be sent to the e-mail address indicated by the applicant or by post (if no e-mail address is indicated in the application). The received document should be signed and then sent back to the sender as a scan.

Within 14 days counting from the end of the epidemic, paper originals of documents should be sent to ZUS. If this requirement is not met ZUS will consider that the agreement has not been concluded and the granted relief will be withdrawn. This will result in the calculation of interest on receivables covered by the agreement.

If the entrepreneur’s financial situation does not improve within 3 months, he will be able to request renegotiation of the contract.

Relief from social security contributions

Employers with less than 10 employees are entitled to be exempted from social security contributions for 3 months (March, April, May 2020) if:

as of 29 February 2020, less than 10 people were registered for social security, and

they will apply to the Social Insurance Institution by 30 June 2020 at the latest.

There is also a possibility of exemption from payment of social security contributions by persons conducting business activity, whose economic situation deteriorated due to the COVID-19 epidemic and in the first month of submitting the application the income from conducting business activity is less than 3 times the forecasted average gross monthly remuneration in the national economy in 2020, which is 15,681 PLN.

In addition, employers are exempted from paying the pro-long-up fee in the event of submitting, in the course of an epidemic emergency, an epidemic or for 30 days after their cancellation, an application to postpone the payment of contributions or spread the payment of contributions in instalments for the period from 1 January 2020.

Solutions of the “Anti-Crisis Shield” dedicated to employers

Posted on April 6, 2020

The amendment to the COVID-19 epidemic counteracting law, commonly referred to as the “Anti-Crisis Shield”, introduces many solutions important for employers. They mainly concern the possibility of obtaining subsidies for salaries, as well as the introduction of flexible working hours (after meeting a number of detailed conditions).

Salary compensation of employees

Benefits provided for by the amended law on special arrangements for preventing, preventing and combating COVID-19 of 2 March 2020. (‘Special Act‘) are not dependent on the number of employees.

The employer can receive a subsidy in the amount:

50 % of the minimum wage for a full-time job, plus the amount of social security contributions payable by the employer on this benefit in the event of a reduction in the salary of an employee who is affected by economic downtime.

Maximum 40% of the average monthly salary in the case of a 20% reduction in the employee’s working hours (however, not less than 0.5 full-time).

No funding is available for those earning more than three times the average monthly salary.

For micro, small and medium-sized businesses, i.e. with no more than 249 employees and an annual net turnover of no more than EUR 50 million), benefits are also provided to subsidise employees’ salaries, depending on the recorded decline in economic turnover. Thus:

A decrease in turnover by at least 30% entitles to co-financing in the amount of maximum 50% of the minimum remuneration increased by the amount of social insurance contributions due from the employer;

A decrease in turnover by at least 50% entitles to co-financing in the amount of maximum 70% of the minimum remuneration increased by the amount of social insurance contributions due from the employer;

A decrease in turnover by at least 80% entitles to co-financing in the amount of maximum 90% of the minimum remuneration increased by the amount of social insurance contributions due from the employer.

This subsidy is possible for a maximum of 3 months. It also covers persons employed under a civil law contract (contract of mandate or other service contract).

The conditions for obtaining a subsidy vary, depending on whether it is applied for by means of economic downtime or a reduction in working hours or for a subsidy not related to these factors.

In case of stoppage or reduction of working time it is required that the employer enters into an agreement with trade unions or employee representatives (if there are no unions).

Other requirements include not being in debt for payment of taxes and social security contributions until the end of the third quarter of 2019 and maintaining the employment of subsidized employees for twice the subsidized period.

Flexible working hours for employees

The Special Act allows the employer to:

Apply less favorable terms and conditions of employment for employees than those resulting from employment contracts;

Reduce the mandatory rest periods for workers to a daily minimum of 8 hours and a weekly minimum of 32 hours (with an equivalent rest period of 8 weeks);

Introduce an equivalent system of working time and extending the daily working time to 12 hours, within a reference period of a maximum of 12 months.

The conditions for implementing the above solutions are:

Decrease in economic turnover due to COVID-19;

Not being in debt for payment of taxes and social security contributions until the end of the third quarter of 2019;

Conclusion of an agreement with trade unions or employee representatives (if there are no trade unions).

Preventive and initial staff screening

During an emergency or epidemic, the employers:

are not obliged to refer employees to periodic examinations. Suspended duties must be carried out within 60 days of cancellation of an emergency or epidemic;

Are obliged to send employees to preliminary and follow-up examinations before they are allowed to work. If the examination cannot be carried out by the labour doctor, another doctor may carry out the examination. An examination by another doctor is valid for 30 days after the cancellation of an epidemic or emergency.

Medical judgements that expired after 7 March 2020 shall remain valid, but no longer than 60 days from the date of cancellation of an emergency or epidemic condition.

Legalization of foreigners’ stay

Foreigners who would be obliged to submit an application for legalisation of their stay during an epidemic or emergency situation will benefit from the following facilitations:

Extension of the period of stay and the period of validity of the visa until the 30th day following the cancellation of an epidemic or emergency situation, and

Extension of the period of validity of the residence permit until the 30th day following the cancellation of an epidemic or emergency.