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Factsheet for measure HR-2020-12/361 Updated – measures in Croatia

Support for preservation of jobs in sectors affected by COVID-19

Potpore za očuvanje radnih mjesta u sektorima pogođenima koronavirusom

Country Croatia , applies nationwide
Time period Open ended, started on 20 March 2020
Context COVID-19
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g., short-time work)
Author Predrag Bejalovic (IJF) and Eurofound
Measure added 07 April 2020 (updated 26 May 2022)
Related ERM support instrument

Background information

Tourism is very sensitive to safety and health because if tourists do not feel safe, they do not travel. Due to the nature of the Croatian tourism where majority of the guests are coming by private booking with personal cars during the summer season in June and August, it is possible to achieve relatively decent results if the pandemic will last one month.

However, if the coronavirus will last for two months or more, there could be really harmful consequences for the Croatian tourism and the economy in total. It should be relatively easy to solve the economic consequences of a short duration of the disease. On the other hand, a longer duration of the pandemic situation in Croatia and in Italy, which is one of Croatian most important foreign trade partner and whose citizens traditionally present a significant part of overseas tourists in Croatia, could have seriously adverse outcomes for the Croatian economic growth. This measure is not exclusively related to tourism industry, but one can assess that this industry has been seriously negatively impacted by the crisis.

The Croatian Employment Service unifies two measures: This measure “Support for preservation of jobs in sectors affected by COVID-19“ HR-2020-12/361 and "Support for preservation of jobs by micro-entrepreneurs whose economic activity has been disrupted due to a special circumstance caused by the COVID-19” HR-2020-27/921 .

Content of measure

The support for preservation of jobs in sectors affected by coronavirus is implemented by the Croatian Employment Service by awarding grants as a form of co-financing of wage costs. The Croatian Employment Service (CES) awards grants to an eligible employer in the amount of HRK 3,250 (€434) per month for full-time worker and HRK 1,625 (€217) per month for part-time worker. CES also awards a proportional part of the amount of HRK 3,250 or HRK 1,625 per worker for the time they did not work according to the decision of the Civil Protection Directorate.

The support can be provided to

  • employers in the following activities: providing accommodation and preparation and serving of food and drinks (Sector I), transportation and storage (Sector H) and health tourism; labour-intensive activities within the manufacturing industry like textiles, clothing, footwear, leather, wood and furniture;
  • employers who have been banned from performing their business activities by decisions of the Civil Protection Headquarters (national, county, local self-government units) and cannot carry out their activities, and
  • all other employers who can prove the adverse impact of special circumstances, if their income is reduced by more than 20%.

Since 26 March 2020 all beneficiaries of grants for self-employment (owners and employees), employers who have been registered at the Croatian Pension Insurance Institute by 29 February 2020 and all workers employed until 29 February 2020 have also been included.

The support cannot be granted if there has been a decrease in the number of employees in the period from 20 March 2020 until the date of submission of the Grant Application, if the percentage of dismissal is greater than:

  • 40% for employers employing up to 10 workers;
  • 20% for small businesses;
  • 15% for medium-sized enterprises and
  • 10% for large companies.

The aforementioned amount of the grant - HRK 3,250 or HRK 1,625 per worker - is applied for March 2020, while for April and May 2020 it will be increased per worker monthly to HRK 4,000 (€534) for full-time job or HRK 2,625 (€267) for part-time job. The state will also cover also payment of social contributions, which amounts to HRK 1,460 (€194) for a net wage of HRK 4,000. In total, the state will pay HRK 5,460 (€728) per employee.

Updates

The following updates to this measure have been made after it came into effect.

11 April 2022

According to the decision of the Governing Board of the Croatian Employment Service (CES) from 29 March 2022, in March 2022, job-keeping grants in the amount of HRK 4,000 (€533) per employee, are applied to the following sectors of European Classification of Economic Activities (NACE): Section N — Administrative and Support Service Activities Travel agency, tour operator reservation service and related activities (NACE 79), Passenger transport by urban and suburban transit systems (NACE 49.31) and Other passenger land transport (NACE 49.39). The grant is not applied to workers employed after 28 February 2022. The eligible to the grant are employees who have been registered with the Croatian Institute for Pension Insurance by 31 March 2021. The CES does not have information on which workers have a COVID-19 certificate, and information on the possession of an EU digital COVID-19 certificate or the acquired conditions for holding an EU digital COVID-19 certificate. This is not within the competence of the CES.

29 January 2022

The Governing Board of the Croatian Employment Service (CES) decided on 26 January, 2022 on new conditions for the measure the Support for the preservation of the jobs - shortened working hours. The support is granted for the temporary introduction of shortened work hours, but no more than 50% of the annual fund of working time may be reduced. The application for the support is submitted in the current month for the following month. Exceptionally the application for support for January and February 2022 is submitted until 28 February 2022. The basic criterion when applying for the support for shortened working hours is the expected decline in the total monthly working hours of all full-time employees for at least 10%. The decline in the total monthly fund of working hours must be caused by temporary disturbances in the production and business process and a drop in revenues and/or receipts for at least 20% compared to the same month in 2019. In addition, employer has to prove one of the following: a) a drop in orders by terminating or amending the contract with the customers; b) temporary inability to contract new orders for his or her goods and services; c) temporary inability to deliver finished products or contracted and paid raw materials, intermediate goods, machinery, tools; and d) impossibility of new orders of raw materials, intermediate goods, tools and machines necessary for work. The decline in revenues and/or receipts is proven through submitted VAT forms to the Tax Administration, which to the CES submits data on the actual percentage of decline in revenues and/or receipts of the mentioned company for the observed period.

07 January 2022

At the Yearly Awards Ceremony of the Croatian Chamber of Economy, held on 9 November 2021, the best in the Croatian economy were recognized for their exceptional work and success during the challenging 2020 year. The Croatian Employment Service received the Special recognition for efficiency in implementation of the Government’s measures, particularly a support for preservation of jobs in sectors affected by COVID-19. Prime Minister Andrej Plenković pointed out that the Croatian government had managed to maintain political stability during the coronavirus pandemic, prevent the collapse of the economy, waves of layoffs and bankruptcies, and stand behind the private sector and workers. The Croatian Employment Service, together with the Ministry of Labour and the Pension System, played an unavoidable role in this process.

30 December 2021

Due to changes in conditions for obtaining the Support for preservation of jobs in sectors affected by COVID-19, until the first week of July 2021, 25,154 employers had to repay the received aid in part or in full amount. The total sum of returned Support is almost HRK 255.8 million (€33.97 million). It is around 2.3% of paid amount. Regarding the Support for shortening working hours, a total of HRK 223.4 million (€29.67 million) of this support was paid and a little more than HRK 771 thousand (€102,390) was returned. This is about 0.3% of the total the amount of benefits paid for this measure.

06 December 2021

According to the decision of the Governing Board of the Croatian Employment Service (CES) from 6 December 2021, in December 2021, job-keeping grants in the amount of HRK 4,000 (€533) per employee, next to sectors in previous months, are extended also to employers from the following sectors of European Classification of Economic Activities (NACE): Passenger transport by urban and suburban transit systems (NACE 49.31) and Other passenger land transport (NACE 49.39). Furthermore, job-keeping grants are also extended to Event catering activities (NACE 56.21) - exclusively to employers who derive most of their income from catering in the event industry. The grant is not applied to workers employed after 30 November 2021. The eligible to the grant are employers who have registered with the Croatian Institute for Pension Insurance by 31 March 2021. The CES does not have information on which workers have a COVID-19 certificate, and information on the possession of an EU digital COVID-19 certificate or the acquired conditions for holding an EU digital COVID-19 certificate. This is not within the competence of the CES. Based on the exchange of data with the competent authorities, the CES receives data, i.e. the percentage of workers from the list of workers submitted by the employer in the application (without personal data on workers) who have an EU digital COVID-19 certificate. Thus, the CES is not involved in the process of determining the percentage of COVID certificates.

17 November 2021

Until now, there has been no evaluation of the measure Support for preservation of jobs in sectors affected by COVID-19. The Croatian Employment Service (CES), the responsible institution for the implementation of the measure, publishes on its web page the list of beneficiaries (https://mjera-zrm.hzz.hr/korisnici-potpore/). The Government on 17 November 2021, accepted the report on Croatian state support for 2020. The report shows that a total aid to support the economy and job preservation measures during the coronavirus pandemic amounted to HRK 1.64 billion (€0.22 billion).

04 November 2021

According to the decision of the Governing Board of the Croatian Employment Service (CES) from 3 November 2021, in October and November 2021, job-keeping grants in the amount of HRK 4,000 (€533) per employee apply to employers from the sector of administrative and support service activities, which includes the activities of renting and leasing and travel agencies, travel organizers (tour operators) and other booking services and related activities. Also, the measure applies to the sector of arts, entertainment and recreational activities, the production and showing of films and videos, sound recording and music publishing activities and their distribution. Furthermore, the measure also applies to organizers of cultural, business and sports events, organizers of fairs and weddings, and related activities such as companies for equipment rental, audio and video recording, ticket sales, hall rental and other companies that most they earn their income from events and public gatherings. Included are also translation activities and interpreter services as well as employers from the area which suffered from the earthquakes, primarily Sisak-Moslavina, Zagreb and Karlovac counties, regardless of the activity with proof of falling income. The shortened working week measure remains in force until the end of 2021 year and covers up to 90% of the wages including contributions. Employers eligible to the full amount of grant should have on 26 October (November) 2021, 70% workers with the EU digital COVID-19 certificate. If on this data, less than 70% of the workers for whom the employer seeks grant, do not have the EU digital COVID-19 certificate or do fulfil the conditions for obtaining it, then the percentage of aid may be allowed in accordance with the percentage of workers with these certificates or who have fulfilled the conditions for obtaining it. The grant is not applied to workers employed after 30 September 2021.

07 September 2021

In August and September 2021, job-keeping grants in the amount of HRK 4,000 (€533) per employee apply to employers from the sector of administrative and support service activities, which includes the activities of renting and leasing and travel agencies, travel organizers (tour operators) and other booking services and related activities. Also, the measure applies to the sector of arts, entertainment and recreational activities, the production and showing of films and videos, sound recording and music publishing activities and their distribution. Furthermore, the measure also applies to organisers of cultural, business and sports events, organisers of fairs and weddings, and related activities such as companies for equipment rental, audio and video recording, ticket sales, hall rental and other companies that most they earn their income from events and public gatherings. Included are also translation activities and interpreter services as well as employers from the area which suffered from the earthquakes, primarily Sisak-Moslavina, Zagreb and Karlovac counties, regardless of the activity with proof of falling income. Other sectors will not fall within this scheme due to the relaxation of COVID-19 restrictions and they are more or less going back to normal. However, the government announced that in case the need for grants emerges in some other sectors, it would consider the matter. The shortened working week measure remains in force until the end of 2021 year and covers up to 90% of the wages including contributions.

Employers eligible to the full amount of grant should have on 24 September 2021 70% workers with the EU digital COVID-19 certificate. If on 24 September 2021, less than 70% of the workers for whom the employer seeks grant, do not have the EU digital COVID-19 certificate or do fulfil the conditions for obtaining it, then the percentage of aid may be allowed in accordance with the percentage of workers with these certificates or who have fulfilled the conditions for obtaining it. The job-retention schemes, including the schemes for salaries and contributions, cost HRK 18 billion (€2.4 billion). Nearly every second job was covered by the schemes, or 700,000 out of 1.59 million, and 92% of the companies operating in Croatia were covered.

25 July 2021

The Governing Board of the Croatian Employment Service (CES) on its meeting on 23 July 2021, extended the support for preservation of the jobs affected by the COVID-19 and the consequences of the earthquakes in the counties Sisak-Moslavina, Zagreb and Karlovac. The measure relates to employers to retain employment of workers whose economic activity was disrupted due to special circumstances. The employers who fulfil the criteria and whose 70% or more workers have confirmation on vaccination against the COVID-19, will be eligible to receive the support in the full amount. The measure is intended for employers in the transport and storage sector, which includes the transport of passengers by land, air and water, as well as air transport of goods. Also are included service activities related to transport as well as the catering and tourism sector - the provision of accommodation and the preparation and serving of food and drink. The measure also applies to administrative and ancillary service activities, which include renting and leasing, travel agencies, tour operators and other related services. Included are also the arts, entertainment and recreation sector, which means the production and screening of movies and videos, the recording and publishing of sound and their distribution. The measure applies to organisers of cultural, business and sporting events, such as fairs and weddings, and related activities. Eligible are all employers who have registered their activity by the Croatian Pension Insurance Institute until 28 February 2021, for workers employed by 30 June 2021. The payment of monthly salary costs for July 2021 will be approved for applications received from 26 July to 25 August, if by the end of mentioned period 70% or more of workers for whom he supports are allowed will be inoculated against the COVID-19. In the case that lower percentage of workers will be vaccinated, the support will be proportionally decreased. When applying, the employers will declare under material and criminal liability that the provided data are correct.

22 June 2021

The Governing Board of the Croatian Employment Service on its meeting on 31 May 2021, extended the support for preservation of the jobs affected by the COVID-19 and the consequences of the earthquakes in the counties Sisak-Moslavina, Zagreb and Karlovac. All employers who have registered their business activity and recorded their employees in the system of the Croatian Pension Insurance Institute can use the measure for workers employed by 31 May 2021 at the latest. In order to receive support, employers will need to prove that in the period from 1 April, 2020 to 30 September, 2020 they had a decline in revenues in comparison with the same period in 2019 on the basis of submitted VAT forms. Alternatively, employers can prove that in June 2021 they had a decline in revenues in comparison with the same month of 2019. Exceptionally, employers who had established their activity before 1 April 2019, and did not start with their business activities immediately in terms of revenue generation and therefore do not have data for comparison according to these criteria, need to prove that they had a drop in income in the month for which they are seeking support compared to the first complete calendar month of business activity.

30 April 2021

The Governing Board of the Croatian Employment Service on its meeting on 30 April 2021, extended the support for preservation of the jobs valued for March and April 2021 to May 2021. Employers who have registered an activity and registered their employees with the Croatian Pension Insurance Institute by 31 December 2020, can use the measure for March and April. The support for May can be used by employers who have registered an activity by 31 January 2021. For April, it is possible to receive support for workers employed no later than 31 March 2021, while May for workers employed no later than 30 April 2021.

23 March 2021

Eligible to support are legal entities in the sports system without a criterion of falling revenues. Eligible are also employers with employed workers with disabilities without a criterion of falling revenues. There is still the right to reimbursement of fixed costs. Employers have to be registered in the Croatian Institute for Pension Insurance at 31 December 2020, while workers have to be employed as of 28 February 2021.

11 March 2021

Zagreb County will award onetime COVID-19 support to small businesses and start-ups. For the support in the total amount HRK 2 million (€265,000) eligible are restaurants and sports facilities whose activities were completely or partially suspended by the Headquarters decision in the period from 27 November 2020. The amount of the support varies from HRK 5,000 (€664) to HRK 15,000 (€1,992) depending on the number of employees the micro-entrepreneur had in February 2021. The support can be used for covering the expenditures for space rent, telecommunications and utility costs, bookkeeping services, settlement of financial obligations for purchased equipment, etc. Eligible are entirely privately owned micro entities with less than 10 employees based in the Zagreb County and operating in neighbouring counties. The public call is open until 12 April 2021.

08 March 2021

Solin-based automotive component maker Ad Plastik is the first Croatian enterprise to publicly announce in 2021 that it is returning its Croatian coronavirus state aid which was received in 2020 year, at a time when it was forced to suspend production due to the coronavirus pandemic and the subsequent lockdown. The management of the company announced that it intends to return the HRK 12.3 million (€1.63 million) in Croatian coronavirus state aid that was used to secure the payment of employee salaries in 2020 year, with an explanation that last year ended with a slightly better result than initially expected. Ad Plastik is holding a general meeting of its shareholders at which one of the points will be the payment of dividends, in which the reason for the return of Croatian coronavirus state aid should also be sought. Namely, one of the conditions for using the aforementioned economic measure is the obligation that the company will not pay out from its operating profit. This condition was mentioned a few months after the virus arrived in Croatia and was a reason as to why many companies quickly changed their minds and decided to return Croatian coronavirus state aid back to the government. Although, as it now seems, the main trigger for the return of the aid was nevertheless the fact that the list of all aid recipients would be made public. According to the data we received from the Croatian Employment Service (CES), so far, 20,850 Croatian enterprises/employers have returned their Croatian coronavirus state aid, and the total amount that sat on that account after its return now stands at almost HRK 206 million (€27.4 million). Since the beginning of the implementation of this measure, a total of HRK 9.395 billion (€1.247 billion) has been paid out to companies to help them preserve jobs, of which HRK 432 million (€57.4 million) was for contributions to those insured in the funded second pension pillar. Croatian coronavirus state aid was paid out to over 111 thousand employers and almost 684 thousand of their employees. The most common reasons for the refund of these benefits, as they have stated from the CES, was the withdrawal of support from their employer, and improperly paid support for sick workers at the expense of the Croatian Health Insurance Institute in the month for which support was received, failure to meet income criteria or other criteria, the non-payment of wages to workers, wrong payments due to multiple requests and so on. Therefore, the CES would not list the payment of profits as the predominant reason for the decision to return the support by the employer. The CES also has noted that voluntary returns mainly took place in the period from June to August 2020, while significant voluntary returns have not been noticed recently. Among the first to return the aid in Croatia was the popular Swedish furniture chain Ikea active in Croatia.

05 March 2021

The Governing Board of the Croatian Employment Service on 4 March 2021 reduced the list of activities that can obtain subsidies for preserving jobs in activities affected by the COVID-19 and the aftermath of the earthquake. Such support will no longer be available to financial and insurance activities as well as to gambling and betting activities.

01 March 2021

The previous anti-epidemic measures which banned the work of catering and hospitality facilities have being relaxed on 1 March 2021, allowing for the opening of restaurant and coffee shop terraces and the serving of drinks and food outdoors. The representatives of Croatian coffee shop owners said that they simply want to be permitted to work and do not want to be a burden to society in any shape or form. The new working hours for Croatian cafes and restaurants are from 06:00 to 22:00, work can only be performed outdoors on open areas (without the need for Plexiglas and glass). It is necessary to provide a distance of 1.5 meters between each chair and at least 3 meters between each table. The maximum number of people on the terrace at any one time should be displayed at the entrance, and the mandatory placement of disinfectants for customers are some of the conditions. Some coffee shop owners are on the verge of bankruptcy due to their dire financial situation caused by the pandemic. As a mean to support the financial liquidity of restaurants and coffee shops, some towns, like the City of Vinkovci, introduced one-off payment in amount HRK 2,000 (€267) per employee in the restaurants and cafés to overcome the dire financial situation. The owners of restaurants and coffee shops in Vinkovci pay the rent of public spaces in symbolical amount of HRK 1 (€0.13). As a measure to celebrate the opening of objects and invite the guests, in the City of Sibenik, coffee to go was free-of-charge on 1 March 2021 between 12 a.m. and 1 p.m.

02 February 2021

On 2 February 2021, the Croatian Employment Service started a payment of subsidy to entrepreneurs for paid fixed costs for January 2021. Hitherto, a little more than 3,000 entrepreneurs have required the subsidy for payment of fixed costs for electricity, water, internet, rent and the similar. The Tax Administration processed and accepted 65% of the requests, in the amount of HRK 21.5 million (€2,87 million). Compared to December 2020, when the costs for which support was requested had to be previously paid, the novelty is that now entrepreneurs can pay the bills within eight days of the obtaining of the subsidy.

08 January 2021

The Croatian Employment Service announced on 8 January 2021, that next to the employers whose business activities suffer due to the COVID-19, eligible for support for the preservation of jobs are employers from the area where the disaster caused by the earthquake was declared. These are employers from Sisak-Moslavina, Zagreb and Karlovac counties, regardless of activity and the level of decline in business activities. Eligible are also employers whose business processes are significantly reduced or restricted due to objective reasons. Objective reasons are: significant damage caused by an earthquake at business or production facilities and/or the inability of workers to come to work. Employers are entitled to support in the amount of HRK 4,000 (€533) per full-time employee, and a proportional part per a part-time employee according to the number of his or her part-time working hours.

27 December 2020

Additional to regular support, entrepreneurs whose work has been suspended by the Decision of the Civil Protection Headquarters of the Republic of Croatia of 27 November 2020 (hereinafter: the Decision) will be reimbursed for all or part of the paid fixed costs for the month of December 2020. Eligible to the reimbursement of paid fixed costs are entrepreneurs with the decrease at least 60% in income and/or revenues in December 2020 compared to December 2019. Exceptionally, the right to reimbursement of paid fixed costs also have entrepreneurs who started operating in 2020 for whom the decrease in income and/or revenues in December 2020 compared to November 2020 was at least 60%. Mentioned fixed costs include monthly cost of rent, lease or concession fee of business premises in which the activity is performed; mandatory reserve requirement cost; monthly cost of electricity, water with associated fees, gas, costs related to the use of the heating network and the removal of municipal waste; utility fee cost; monthly expenditures for monument fee, monthly fee for public television, monthly fee for public use of music, monthly subscription to daily, weekly and monthly newspapers; monthly cost of internet and fixed telephone line; monthly cost of bookkeeping service and one twelve of the annual fee for organizing games of chance in casinos, slot machines and betting game. Entrepreneurs eligible for reimbursement are those whose business activities in the catering facilities and provision of catering services on agricultural tourism; closed casinos and slot machine clubs; temporary closed gyms, fitness centres and sports and recreation centres; temporary closed children's and other workshops and organization of dance schools; and temporary closed foreign language schools.

04 December 2020

On 4 December 2020, the Employment Service published amended conditions for granting support for the preservation of jobs of employers whose business was disrupted due to the impact of the COVID-19 pandemic and for employers covered by decisions of the Civil Protection Headquarters. Among other things, employers are enabled to receive support for November and December 2020 in the event of a decrease in revenues in one month (November 2020 / November 2019 and December 2020 / December 2019). This means the continuation of a monthly allowance of HRK 4,000 (€533) per worker during the lockdown and exemption from payment of social contributions. In addition, the activities eligible for support have been expanded, the right to support market-related undertakings has been introduced and the restriction on board members, directors and procurators regardless of the size of the employer has been lifted. This measure is designed for more than 80,000 private-sector workers. The government had so far preserved 630,000 jobs and helped 107,000 companies by disbursing a total of HRK 7.4 billion (€0.98 billion). As an additional support to employers who are beneficiaries of support from the Employment Service will be available a reimbursement of a part of fixed material costs to entrepreneurs whose work is prohibited or restricted. It will be realised through the Tax Administration.

12 November 2020

In measures to support for preservation of jobs in activities affected by COVID-19, employers are given the opportunity that "if there is a termination of the employment contract, business termination or extraordinary dismissal of the employer, he or she does not have to make payment for a worker whose contract has been terminated for a month or days in the month due for payment”. In other words, in such situation, the support to employers is not conditioned by the retention of workers, but their support is only reduced by the number of workers to whom they give a business-related dismissal. Trade Unions state that some employers use the epidemic as an excuse to get rid of workers they want, or those for an indefinite period who will later replace others, with more flexible forms of work, etc. Therefore, on the meeting dedicated to the continuation of measures on 12 October 2020, representatives of the Trade Union in the Governing Board of Croatian Employment Office (a body responsible for designing and implementation of the measures) asked for a ban on business-related dismissal in companies receiving support. The Trade Unions believing that the preservation of jobs with public funds should be conditional on preserving all workers, not just those the employer wants to keep. According to their opinion, this is not an absolute ban on dismissal and reduction of the number of employees, because the expiry of a fixed-term contract, dismissal caused by the employee's behavior, extraordinary dismissal, personal dismissal, dismissal of the employee to the employer and retirement are fully allowed, but economic cancellation should not be allowed.

23 October 2020

The Croatian Employment Service published a newly adjusted measures intended to preserve jobs affected by the COVID-19 epidemic. This measure unifies two previous measures: “Support for preservation of jobs in sectors affected by COVID-19“ HR-2020-12/361 and "Support for preservation of jobs by micro-entrepreneurs whose economic activity has been disrupted due to a special circumstance caused by the COVID-19” HR-2020-27/921 . If an employer wants to use the new, unified measure, he or she must follow the prescribed procedure for giving up one of the previous two measures. It is not possible to accumulate the measures; the employer must decide which of the measures is more favourable for him or her. The new eligible sectors, in addition to those previously identified, are: agriculture, forestry, and fishing - only crop and livestock production, hunting and related service industries and fishing, and other service industries - repair of computers and personal and household goods and other personal service industries. The subsidy can be requested for all employees taken on before 30 September 2020. The subsidy amount is determined by the decline in revenue. This must be a decline of at least 60% to qualify for the maximum subsidy of HRK 4,000 (€533) per employee. The employer is obliged to retain all employees – business-related dismissal is not permitted. If an individual employee’s employment contract is terminated for another reason, the employer is entitled to the subsidy payment for the days on which the employee worked until the employment contract was terminated. Payment of funds follows, as before, on the last day of the month for the previous month, and at the latest upon submission of proof that the salary was paid - a VAT form or other legal document. This decision is applied for the period October-December 2020.

20 October 2020

The government announced on 20 October 2020, its intention is to change the conditions for assistance to the companies having problems due to COVID-19. The graded assistance will depend on a downturn in the volume of business. Thus, businesses with at least a 40% fall in their activity will be eligible to use monthly grants of HRK 2,000 (€266.66) per employee. Those businesses with a 50% fall in their turnover can count on monthly grants of HRK 2,500 (€333.33) per employee. Those employers experiencing a slump of up to 55% in their business activity can be awarded HRK 3,000 (€400) per employee per month, whereas HRK 3,500 (€466.66) is designed for a slump of up to 60%, and the highest monthly grant per employee is the amount of HRK 4,000 (€533.33) is to be given to businesses with a slump of more than 60% in their business activities. Also, those employers are exempt from paying contributions in relation to those grants. The fall in business activity will be compared to the volume of business in the second and third quarters of 2019, so as to get a more realistic picture. Some businesses in the hospitality sector will be able to choose whether to compare the current state of affairs on a monthly basis or in relation to the quarters year-on-year. The new set is applicable as of 1 October 2020 and will be on force until the end of the year. The government underscored that to date, the government had disbursed HRK 6.85 billion (€912 million) for the job-retention scheme and that this amount will have risen above HRK 7.2 billion (€960 million) by the end of this year. The latest set has been hammered out following consultations with social partners, employers and trade unions.

02 October 2020

The statistics of users of Support for preservation of jobs in sectors affected by coronavirus in June 2020 shows that of total 18,030 users, 95.1% were micro entrepreneurs with up to 10 workers, 4.13% were small entrepreneurs with 11 to 50 workers, while less than 1% were medium entrepreneurs (with 51 to 250 workers) and large entrepreneurs (with more than 251 workers). Total number of their workers was 78,322, while expenditures were HRK 304,704,621 (€40,627,283). Since September 2020, the measure has been directed towards the same sectors as before, but conditions for eligibility were changes. Employers who are prevented from business activities are also eligible by the decision of the National or Regional Civil Protection Headquarters, regardless of sectors and income criteria. Furthermore, employers whose business activity is restricted by the decision of the National or Regional Civil Protection Headquarters, regardless of the sector and with a drop of revenues of 60% or more are also eligible. Eligibility criteria for the employers in the sectors: transport, storage, catering, events, arts and entertainment (NKD classes H, I, J, M, N, R and S) is revenue decline of at least 60% for the comparative period. Employees should be employed since 31 August 2020 and beyond, while employers should have been registered in the system of the Croatian Pension Insurance Institute by 29 February 2020.

09 September 2020

At the session held on 7 September 2020, the Management Board of the Croatian Employment Service (CES) extended the Job Preservation Support (COVID-19) for the period until the end of 2020. The measure is directed towards the same sectors as before: transport and storage - primarily passenger transport by land; accommodation and food and beverage service activities; travel agencies, tour operators and other reservation services and related activities; creative, artistic and entertainment activities, entertainment and recreation activities and production and showing of films and video films; recording and distribution of sound recordings and distribution of music recordings. Eligible employers are those whose revenues decreased for at least 60%. The monthly amount of the support is HRK 4,000 (€533) per full-time employee, with the proportional part per employee according to the number of hours of part-time work and HRK 250 (€33) contribution for pension insurance based on mandatory individual capitalized saving (fully funded). The measure also includes micro-entrepreneurs. The support for micro-entrepreneurs is in the amount of HRK 2,000 (€266.67) per month per full-time worker, or a proportional part per worker according to the number of hours worked part-time.

07 September 2020

At the session held on 29 July 2020, the Management Board of the Croatian Employment Service (CES) extended the Job Preservation Support (COVID-19) for August 2020 and included also micro-entrepreneurs. The support for micro-entrepreneurs is in the amount of HRK 2,000 (€266.67) per month per full-time worker, or a proportional part per worker according to the number of hours worked part-time.

10 July 2020

At the session held on 10 July 2020, the Management Board of the Croatian Employment Service (CES) introduced the Job Preservation Support (COVID-19) for July and August 2020. The measure is directed towards following sectors: transport and storage - primarily passenger transport by land; accommodation and food and beverage service activities; travel agencies, tour operators and other reservation services and related activities; creative, artistic and entertainment activities, entertainment and recreation activities and production and showing of films and video films; recording and distribution of sound recordings and distribution of music recordings.

Eligible employers are organizers of cultural, business and sporting events, organizers of fairs and weddings, and related activities such as equipment rental companies, audio and video recording, ticket sales, hall rental and other companies that generate most of their income from events and public gatherings. Therefore, eligible employers are commercial companies, crafts, family farms and natural persons who are self-employed and who are insured on that basis.

Eligible employees are those employed by employers from the target group of employers: all insured persons with the employer in question (regardless of whether the employment is a fixed-term or indefinite, whether they are citizens of Croatia, EU or third countries, full-time or part-time or have some status such as a single parent, a Croatian war veteran and a posted worker) and workers employed in representative offices.

The monthly amount of the support is HRK 4,000 (€533) per full-time employee, with the proportional part per employee according to the number of hours of part-time work and HRK 250 (€33) contribution for pension insurance based on mandatory individual capitalized saving (fully funded).

Employers need to prove that in June 2020 they had a decrease in turnover/revenue at least 60% compared to June 2019, based on the submission of the VAT form for June 2020 and June 2019 to the Tax Administration to receive support for July, and a 60% drop in July to receive support for August. Quarterly VAT payers have to prove a decrease in turnover/revenue of 60% in the second quarter of 2020, compared to the second quarter of 2019. If the employer operates for less than 12 months, it is necessary for him or her to prove a decrease in turnover/revenue by at least 60% in June 2020 compared to February 2020 based on the submission of the VAT form for June and February 2020.

29 May 2020

At the session held on 29 May 2020, the Management Board of the Croatian Employment Service (CES) introduced the Job Preservation Support (COVID-19) for June 2020, which continues the job preservation support for eligible sectors whose business cannot be opened for objective reasons or have a decline of at least 50%, and caused by the COVID-19 crisis, which seeks to avoid the dismissal of workers from the activities actually affected and the sudden entry of workers into the unemployment register.

The amount of the subsidy is HRK 4,000 for the month of June per full-time worker, i.e. the proportional part per worker according to the number of part-time working hours.

Employers need to prove that in May 2020 they had a decrease in income by at least 50% compared to May 2019, based on the submission of the VAT form for May 2020 and May 2019 and that they are registered in the Croatian Pension Insurance Institute system by 29 February 2020. If the employer operates for less than 12 months, it is necessary to prove a decrease in turnover by at least 50% in May 2020 compared to February 2020 based on the submission of the VAT form for May and February 2020.

However, CES has changed the conditions and methods of using funds for the implementation of active employment policy measures in 2020, and the most significant change is that the employer will have to repay support if it pays a dividend or profit share by the end of 2021.

This measure should cover up to 100,000 employees, or about 450,000 less than before. The calculations show, that it should be significantly cheaper for the state treasury, given that in June, as estimated in government circles, it would cost around HRK 400 million (€53 million).

Use of measure

At the end of March, around 65,000 employers with around 400,000 thousand workers were registered as users of the scheme at the CES. At the end of April, the government has paid more than one and a half billion HRK (€200 million) to preserve jobs for around 485,000 employees. Almost 84,000 employers have received support, including 145 large entrepreneurs.

The main criterion for assistance was a 20% drop in turnover. Leading recipients of the grants are big touristic company Valamar Riviera with more than 2,500 employees who have been paid more than eight million HRK (€1.07 million) followed by Boxmark Leather with more than 2,000 employees, Mlinar with 1,737 employees, a car parts manufacturer from Solin AD Plastik with more than 1,500 employees. Of all beneficiaries of the grant 91,78% are micro firms with less than 10 employees, 6,99% are SME with less than 50 employees, 1.06% are medium employers with less than 250 employees, 0.03% are bigger employers with more than 250 employees.

According to the data of the Ministry of Labour and Pension System issued in May, the measures included about 550,000 employees. According to the same source, in March and April 2020 alone, the state allocated a total of around HRK 3.5 billion (€467 million) to measures to preserve jobs in the context of the coronavirus pandemic. It is estimated that the measures in May 2020 costed the state treasury about HRK two billion (€267 million). Therefore, the state has spent around HRK 5.5 billion (€734 million) in three months of implementing measures to preserve employment in the coronary crisis.

In the period March 2020 - May 2021, the total amount of the subsidy paid for preservation of jobs was HRK 11,054,880,619 (or €1,468,111,636). The biggest number of subsidized workers (581,300) was in April 2020, while in period November 2020 - May 2021, this number of workers varied between 118 thousand and 165 thousand. According to the type of companies: 48% were micro companies with less than 10 employees, 20% were SMEs with 11-50 employees, 16% were medium companies with 51-250 employees and 16% were bigger companies with more that 250 employees.

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
Public employment service
National funds

Social partners

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

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

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 are members of the Management Board of the Croatian Employment Service (CES) which decides about the characteristics, duration and the amount of a particular measure. The Management Board of the Croatian Employment Service decides about the content and possible extension of the measures every two months.

Views and reactions

Trade Unions demanded that the recipients of the aid should be publicly disclosed because they fear that abuse of the obtained funds is quite possible. These data are partly now available online .

Sectors and occupations

    • Economic area Sector (NACE level 2)
      C - Manufacturing C10 Manufacture of food products
      C11 Manufacture of beverages
      C13 Manufacture of textiles
      C15 Manufacture of leather and related products
      C22 Manufacture of rubber and plastic products
      H - Transportation And Storage H49 Land transport and transport via pipelines
      H50 Water transport
      H51 Air transport
      H52 Warehousing and support activities for transportation
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities

This case is not occupation-specific.

Sources

  • 12 March 2020: Donesene Mjere za očuvanje radnih mjesta uzrokovanih posebnim okolnostima uvjetovanih koronavirusom COVID – 19 (www.hzz.hr)
  • 02 April 2020: Prijedlog zaključka o drugoj skupini mjera za pomoć gospodarstvu uslijed epidemije koronavirusa (vlada.gov.hr)
  • 06 April 2020: Statistika korisnika potpore očuvanje radnih mjesta - ožujak 2020. (mjera-orm.hzz.hr)
  • 29 May 2020: Employer who pays profit by the end of 2021 will have to return the aid (www.novilist.hr)
  • 29 May 2020: Potpora za očuvanje radnih mjesta u djelatnostima pogođenima Koronavirusom (COVID – 19) za lipanj 2020. godine (mjere.hr)
  • 29 May 2020: CES decision on Amendments to the Terms and Conditions for the Use of Funds for the Implementation of Active Employment Policy Measures in 2020 (www.hzz.hr)
  • 01 June 2020: Statistika korisnika potpore očuvanje radnih mjesta - ožujak 2020. (mjera-orm.hzz.hr)
  • 10 July 2020: Potpora za očuvanje radnih mjesta u kriznim djelatnostima pogođenima Koronavirusom (COVID – 19) za srpanj i kolovoz 2020. godine (mjera-orm.hzz.hr)
  • 29 July 2020: Potpore za očuvanje radnih mjesta u djelatnostima pogođenima Koronavirusom (COVID – 19) – Mikropoduzetnici (www.hzz.hr)
  • 04 September 2020: Statistika korisnika potpore za očuvanje radnih mjesta - lipanj 2020. (mjera-orm.hzz.hr)
  • 08 September 2020: Potpore za očuvanje radnih mjesta se nastavljaju, početak prijava od idućeg tjedna (www.hzz.hr)
  • 09 September 2020: Potpora za očuvanje radnih mjesta - rujan-prosinac 2020. za djelatnosti (mjere.hr)
  • 15 October 2020: COVID-19 kao izgovor – uz Vladin blagoslov (www.sssh.hr)
  • 20 October 2020: Predstavljene nove mjere za očuvanje radnih mjesta: Dvije su ključne izmjene (www.poslovni.hr)
  • 20 October 2020: Plenković: Uvodimo stupnjevanje potpore tvrtkama sukladno padu prometa, potpore za kraće radno vrijeme dižu se na 2800 kuna (www.tportal.hr)
  • 23 October 2020: Potpora za očuvanje radnih mjesta u djelatnostima pogođenima Koronavirusom (COVID – 19) za listopad – prosinac (mjere.hr)
  • 04 December 2020: Upravno vijeće Zavoda donijelo odluku o izmjenama i dopunama uvjeta korištenja mjera (www.hzz.hr)
  • 04 December 2020: Uputa o provedbi mjere nadoknade dijela ili svih plaćenih fiksnih troškova u sklopu mjere Potpore za očuvanje radnih mjesta u djelatnostima pogođenim Koronavirusom (COVID-19) (www.porezna-uprava.hr)
  • 08 January 2021: Proširenje potpora za očuvanje radnih mjesta za područja pogođena potresom, nastavak OSI i SRV potpora za 2021. godinu (www.hzz.hr)
  • 02 February 2021: Potpore poduzetnicima za fiksne troškove za siječanj (The subsidy to entrepreneurs for paid fixed costs for January 2021). (vijesti.hrt.hr)

Citation

Eurofound (2020), Support for preservation of jobs in sectors affected by COVID-19, measure HR-2020-12/361 (measures in Croatia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HR-2020-12_361.html

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