Possibility to receive state supports in the case of reduced working hours (Kurzarbeit)

Support for job retention has come to focus in the economic environment of the epidemic. From April 29, you can apply for 105/2020. according to a government decree, state aid calculated on the basis of several times amended rules related to reduced working hours, which affects thousands of employees. We would like to draw your attention that the recent changes compared to the original conditions are easier to access support for everyone. This summary contains the most important rules currently in force.

The employee and the employer can apply for support on the basis of their joint application to the county or county government office, if they use reduced working hours to prevent the cutback of companies due to the pandemic period, to protect jobs.

The essence of the support, in case the employee is employed part-time, participates in work-related development for a part of the lost working time affected by the reduction (if individual conditions do not have to be determined if certain conditions are met), the employer pays wages for these periods, while seventy percent of the working time affected by the reduction is paid in part or full by state  resources instead of the employer.

The conditions include that the employer undertakes not to terminate the employee's employment during the period of the allowance and for one month thereafter. The employee agrees to do the work, and there will be no a barrier to his full-time employment after the emergency, and he is at the employer’s disposal during individual development.

According to the employment contract to be amended after the declaration of the emergency, the reduced working hours are part-time working at least twenty-five percent of the employment contract before the amendment, but not exceeding eighty-five percent, so the allowance can be used for a minimum of 2 hours and a maximum of 6.8 hours per day. The job is achievable on a part-time basis, or it is also possible to use remote working or working from home (“home office”).

Individual development time is exempted from the obligation to work to the extent of thirty per cent of the time lost due to reduced working time during the support period or within two years thereafter for the purpose of development related to the job or the employer's activity. Individual development time must only be agreed for at least the duration of the grant if the reduced working time exceeds half of the working time under the pre-modification employment contract, while the employee's original net income cannot be affected. In this case, the employer has a wage payment obligation for the development period.

The amount of the subsidy is 70 percent of the proportion of the amount of the basic salary determined according to the general rules, less the personal income tax advance and contributions, for lost working time, a maximum of the twice of the net minimum wage, so HUF 214,130 that can be claimed. The available maximum support is in this way is HUF 74,945 / person / month, for  maximum of 3 months.

The maintenance is a public subsidy granted directly to the employee on a monthly basis, free of public charges. No support may be used for atypical employment contract, and an extraordinary work may not be ordered during the support period.

The application can be submitted electronically by the employer to the capital and county government offices (using the form published on the website of the National Employment Service). An agreement between the employee and the employer regarding reduced working hours and individual development time must be attached. Importantly, support for applications submitted at the same time for the same site (when the employer submits a joint application with several employees) may be for the same period.

The government office will examine the applications within eight working days and decide whether to accept the grant or reject the application. There is no appeal against the decision and it cannot be challenged in court. If the application is rejected, the employer and the same employee may submit a repeated application no more than once.

The benefit is terminated if the employee and the employer request it in a joint declaration, if the employee's employment is terminated or if one of the parties fails to fulfill an obligation in connection with the benefit. In the case of incorrect or abusive conduct, the aid must be repaid.

Please note that in case the employer fulfills the conditions for receiving the grant, we recommend to make a detailed calculation before submitting the application in order to determine whether the employer is worth using the grant (given that that a maximum of twice the net mandatory minimum wage is taken into account when determining the occupational safety and health benefit, regardless of the employee's actual wage, and the difference may have to be compensated by the employer with an additional wage).

Special rules for support for workers in the field of research and development

A 103/2020. (IV. 10.) (“R&D Decree”) introduced support for the employment of employees engaged in research and development activities during emergencies.

The condition of the support is that the employee must be employed by the employer as a researcher and developer at least from the date of the declaration of the emergency, he must not spend his period of notice and not receive other employment support (reduced-time employment allowance, job creation or job retention allowance).

On the employer's side, the application must confirm that its economic circumstances justify the use of the aid, its direct and close connection with the emergency, the measures taken and expected to overcome the economic difficulties so far, and the company has been in operation for at least 6 months.

The benefit is non-refundable and can be claimed for a maximum of three months, and will be paid later directly to the employer.

The amount of financial support is determined as follows:

• if the employee's gross salary on 11 March 2020 is HUF 670,000 or more: HUF 318,920, or
• if the employee's gross salary does not reach HUF 670,000 on 11 March 2020, the amount of HUF 318,920 calculated as the ratio of the employee's gross salary to HUF 670,000.

This support can also be applied for in the mentioned above, as specified on the website of the National Employment Service.