Background information

When announcing the measure, the government stresses that the scheme envisages the provision of state co-financing for wages according to reduced working hours. The measure is designed to help out employers who are forced to reduce working hours due to operating difficulties and a drop in business activities. The expert for the labour market underlines that this measure should not be seen isolated and only as a measure to preserve jobs, because that is not its original idea. In a crisis, employment always decreases, this is a normal and balancing mechanism that is impossible to avoid. Therefore, the measures are taken to prevent an extremely high increase in unemployment and so that the economy does not lose its ability to quickly recover after the pandemic ends.

The wage subsidy is for workers for whom the employer, due to business difficulties, cannot ensure the payment of full salary for a five-day working week. The measure was reactivated during the COVID-19 pandemic for sectors particularly affected by the crisis and those unable to exercise their activities.

Content of measure

Employers in the following sectors are eligible for the wage subsidy: accommodation and restaurants, transportation and storage, health, tourism, labour intensive activities within manufacturing (such as textile, clothing, footwear, leather, wood, furniture). Furthermore, eligible are also employers whose activities have been prohibited by the government and those who can prove that their revenue is reduced by more than 20% due to the crisis. The period is not directly specified, but the application for the wage subsidy requires the provision of a tabular comparison of revenue by the end of the month in which the claim was filed with the same month of the previous year.

Sectors affected by the crisis were entitled to a wage subsidy by the public employment service amounting to HRK 4,000 (€ 534) per month for a full-time worker and HRK 2,625 (€267) per month for a part-time worker. In Croatia, full-time is 40 hours per week, while part-time is deemed 20 hours per week. According to the data by the Croatian Pension Insurance Institute, only around 4-5% of all employees were working part-time. There are people that are working fewer hours, for example, in education, but this is very rare, less than 1% of all employees.

According to the amended conditions as of 6 April 2020, employers are eligible for support:

• For workers employed until 19 March 2020
• If they have registered their workers at the Croatian Pension Insurance Institute until 29 February 2020
• If they are beneficiaries of self-employment support (owners and employees)
• If they dismissed workers in March 2020 and they intend to re-employ these workers. The government also covers social security contributions.

The subsidy is not granted if the employer dismisses more than:

• 40% of the employees in micro-companies
• 20% of employees in small companies
• 5% of employees in medium-sized companies
• 10% of employees in large companies.

Use of measure

According to the annual reports of the Croatian Employment Service (CES), subsidies paid to employers for employment preservation amounted to only HRK 20,139 (€2,677) in 2009 and HRK 26,409 (€3,515) in 2010. In 2012, there were 170 new participants out of a total of 703 participants in the measure, while in 2013 the total number was 1,310. In the annual report of the CES from 2014 to 2019, no new cases or users of this measure are mentioned. During the COVID-19 crisis, by the end of May 2020, 98,532 employers with 486 thousand workers received support.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public employment service	European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

The representatives of social partners - from representative trade unions, primarily two biggest TU confederations - the Union of Autonomous Trade Union of Croatia (Savez samostalnih sindikata Hrvatske) and Independent Trade Unions of Croatia (Nezavisni hrvatski sindikati) from workers' side and representatives of Croatian Employers’ Association, from employers' side, are members of the Governing board of the Croatian Employment Service. Therefore, in that way they participate in the design, implementation and monitoring of the measure. During June 2020, the government had actively communicated with social partners and the Ministries of finance and economy regarding the implementation of the European Commission's SURE job-keeping programme. They finally agreed and the government on its session held on 25 June 2020 accepted the Decision on a new job retention scheme for companies affected by the coronavirus crisis.

Views and reactions

Social partners are fully aware of the importance of support for preservation of jobs as a timely and effective active employment policy and always support its implementation.

Sources

• 30 July 2014: Zakon o očuvanju radnih mjesta (Law on the Support for Preservation of Jobs) (OG 93/14) (narodne-novine.nn.hr)
• 05 May 2015: Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2014 (Yearly Report for 2014) Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2014 (Yearly Report for 2014) Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2014 (Yearly Report for 2014) Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2014 (Yearly Report for 2014) Croatian public employment service (2013), 'Yearly Report' (Godišnjak) (www.hzz.hr)
• 30 May 2015: Croatian Employment Service, Yearbook 2014 (Godisnjak Hrvatskog zavoda za zapošljavanje 2014) (www.hzz.hr)
• 08 January 2018: Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2017 (Yearly Report for 20174) (www.hzz.hr)
• 07 May 2018: Croatian Employment Service, Yearbook 2016 (www.hzz.hr)
• 12 March 2020: Donesene Mjere za očuvanje radnih mjesta uzrokovanih posebnim (Accepted Measures for Job Protection in the Conditions of the COVID-19) (www.hzz.hr)
• 02 April 2020: Prijedlog zaključka o drugoj skupini mjera za pomoć gospodarstvu uslijed epidemije koronavirusa (The Proposal of the Second Wave of JoB Protection Measures in the Condition of the COVID-19) (vlada.gov.hr)
• 07 April 2020: Statistika korisnika potpore očuvanje radnih mjesta - ožujak 2020. (Statistics of Beneficiaries of a Job Preservation Support - March 202) (mjera-orm.hzz.hr)
• 02 June 2020: Non-working Friday in the COVID-19 (Neradni petak u uvjetima COVID-19) (www.poslovni.hr)
• 11 June 2020: Proširenje mjera protiv COVID-19 na sve sektore (Extension of the Measure Against COVID-19 to all sectors) (www.poslovni.hr)
• 25 June 2020: Izvješće o do sada poduzetim mjerama za očuvanje radnih mjesta (The Report of Already Applied Measures for Job Preservation) (vlada.gov.hr)
• 26 June 2020: Aladrović: Država će radnicima plaćati i do 2,5 radna dana (hr.n1info.com)
• 29 June 2020: Sindikati i poslodavci s Vladom dogovorili uvjete mjere skraćenog radnog vremena (Agreed the Terms of the Reduced Working Time) (n1info.hr)
• 09 July 2020: Statistika korisnika potpore za očuvanje radnih mjesta - svibanj 2020 (Statistics of beneficiaries of job preservation support - May 2020). (mjera-orm.hzz.hr)
• 10 July 2020: Potpore za očuvanje radnih mjesta u djelatnostima pogođenima Koronavirusom (COVID – 19) (The Support for Job Preservation in the Economic Sector Suffered by the Covid-19) (mjera-zrm.hzz.hr)