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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case HR-2020-27/893 Updated – measures in Croatia

Co-financing of wages for reduced working hours (SURE implementation)

Sufinanciranje razmjernog dijela plaće sukladno skraćenom radnom vremenu

Country Croatia , applies nationwide
Time period Temporary, 01 July 2020 – 31 December 2021
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
Case created 26 June 2020 (updated 05 February 2021)
Related ERM support instrument

Background information

During the three weeks period from 1 to 19 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 program. They finally agreed on the criteria for the shortening of working hours and the government accepted the Decision on a new job retention scheme for companies affected by the coronavirus crisis on its session held on 25 June 2020.

Content of measure

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 by more than 20%. The new support measure, to be in force from 1 July to 31 December 2020 will target firms from all sectors that have 10 or more employees having a revenue decline of at least 20% for the comparable month 2020 to 2019. For employers in the manufacturing industry a drop of less than 20% is allowed.

Depending on the needs of the employer, the state can co-finance wages for working time reductions between 10% to 50% of working hours per month. That means from 2.5 working days, up to 50% of the fund of monthly hours. Therefore, the co-financing of workers can be between HRK 400 and 2,000 (€53 to €264). In other words, the financial aid can be given to companies that would work 36 hours a week and shorter, but not shorter than 20 hours a week. This support will not be available for teleworkers.

The government intends to reduce the administrative burden for application to a minimum.

Updates

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

08 January 2021

Next to the COVID-19, Croatia suffered from terrible earthquakes - the first one in March 2020 in the Capital, the City of Zagreb, and the second one at the end of December 2020 in cities Sisak, Petrinja and Glina, which also caused serious material and economic damage. The Croatian Employment Service published on 8 January 2021, a newly adjusted measure co-financing of wages for reduced working hours. The most important innovations include extending support to shorten working hours until 31 December 2021, as well as supplementing support for preserving jobs in activities affected by COVID-19 and the consequences of the earthquake disaster in Sisak-Moslavina, Zagreb and Karlovac counties for January and February 2021. With these changes, employers are able to support the reduction of working hours for the temporary introduction of full-time work for a period shorter than the monthly fund of hours, up to a monthly maximum of 90% of working hours. The shortened schedule of working hours may not exceed 70% of the annual fund of working time.

23 October 2020

The Croatian Employment Service published a newly adjusted measure co-financing of wages for reduced working hours. The subsidy is granted for temporarily reduced working hours for employees, but not less than 70% of the monthly fund of hours, up to a maximum of HRK 2,800 (€373) per month net per employee. This is opposed to the previous maximum of 50% of hours and HRK 2,000 (€266.6) per month net per employee. These payments are not affected if the employee received part of the salary compensation on some other basis (sick leave, annual leave), and part on the basis of the measure in question. The employer may not demand subsidised employees to work overtime; employ people for positions that can be performed by subsidized employees; use posted employees or the occasional work of pupils or students; and contract or order work from a separate place of work (remote work) for subsidised employees. The employer is no longer obliged to submit weekly records of working hours for each employee to the Croatian Employment Service. The employer must submit records of working hours on a monthly basis, which may take the form of a collective document for all employees for whom subsidy is requested.

20 October 2020

The government announced on 20 October 2020, its intention is to simplify the procedure and to enable a wider range of employers and businesses in certain sectors to be eligible to use the measures. Considering reduced working hours, the measure will allow for a reduction up to 70% instead of the current 50%. The maximum monthly grant per worker will increase from the current HRK 2,000 (€266.66) to 2,800 (€373.33). According to the official sources, 606 employers with more than 30,000 workers on their payrolls have used the reduced working hours measure in times of crisis. The measure will continue until the end of year.

02 October 2020

According to the Croatian Employment Service unofficial data obtained on demand, in the period from 1 June to 16 September 2020, the total number of applications were 545 and it was related to 15,550 workers. That is relatively small having in mind that according to the data by the Croatian Bureau of Statistics there are around 153,000 enterprises which employ around 1.03 million of employees. There are no data on the number of jobs saved in the short and medium term (and workers return to exactly the same employment situation), as well as on the number of companies saved. It is hard to assess the influence of the measure on the long-term competitiveness of companies and the economy a whole, but without doubt large financial outlays are needed for the implementation of the measure. This indirectly causes the requirement for bigger public funding and increased the tax burdens, once SURE funds will expire.

03 July 2020

The Croatian Employment Service better specified the conditions for obtaining support.

Use of measure

The estimated value of the investment in the new scheme will reach some HRK 3 billion (€397 million) by the end of 2020, and will be financed mostly by the European Commission's temporary Support to mitigate Unemployment Risks in an Emergency (SURE) program. The social partners believe that support for a shorter working week will be used by 100,000-150,000 workers each month.

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
EU (Council, EC, EP)
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:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level

Involvement

During the three weeks period from 1 to 19 June, 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 program. They finally agreed and the government accepted the measure.

Views and reactions

The social partners were very supportive having in mind the seriousness of the economic crisis in Croatia due to COVID-19.

Social partners expressed their satisfaction with the measure, so the Union of Autonomous Trade Union of Croatia in article Usvojena potpora za očuvanje radnih mjesta – skraćivanje radnog vremena explains the detail of support. Croatian Employers' Association informed its members about the measure on its webpage.

Sources

  • 23 June 2020: Nove mjere za ocuvanje radnih mjesta (www.hup.hr)
  • 25 June 2020: Izvješće o do sada poduzetim mjerama za očuvanje radnih mjesta te planiranim mjerama za iduće razdoblje (vlada.gov.hr)
  • 26 June 2020: Sindikati i poslodavci s Vladom dogovorili uvjete mjere skraćenog radnog vremena Počevši (hr.n1info.com)
  • 26 June 2020: Trade unions, employers and governement have agreed on the terms of the part-time work measure government (hr.n1info.com)
  • 29 June 2020: Aid for job preservation - part - time work - criteria and application Croatian (mjera-orm.hzz.hr)
  • 29 June 2020: Potpora za očuvanje radnih mjesta - skraćivanje radnog vremena (mjera-orm.hzz.hr)
  • 30 June 2020: Potpora za ocuvanje radnih mjesta skracivanje radnog vremena (www.hgk.hr)
  • 30 June 2020: Usvojena potpora za očuvanje radnih mjesta – skraćivanje radnog vremena (www.sssh.hr)
  • 20 October 2020: Predstavljene nove mjere za očuvanje radnih mjesta: Dvije su ključne izmjene (www.poslovni.hr)
  • 23 October 2020: Potpore za skraćivanje radnog vremena (mjere.hr)
  • 31 October 2020: Izmijenjeni uvjeti ostvarivanja novčanih potpora za isplatu plaća od listopada do prosinca 2020. godine (www.rif.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)

Citation

Eurofound (2020), Co-financing of wages for reduced working hours (SURE implementation), case HR-2020-27/893 (measures in Croatia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.