Factsheet for case HR-2020-27/921 – Updated – measures in Croatia
|Country||Croatia , applies nationwide|
|Time period||Temporary, 01 July 2020 – 23 October 2020|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Predrag Bejalovic (IJF) and Eurofound|
|Case created||04 July 2020 (updated 13 January 2021)|
|Related ERM support instrument|
The coronavirus pandemic has seriously affected the overall Croatian economy, but the micro-businesses have been hit hardest. According to the survey run by the Croatian Chamber of Economy which covered over 2,700 companies, 95% of companies had reported a decline in turnover and 28% suffered a decline of 100%. Three-quarters of the companies surveyed, or 74%, reported drops in production, and a fifth of them, or 21%, had seen their production fall by 100%.
Supply chains have also been impacted by the outbreak, with 61% of companies reporting problems. Forty-five percent of companies recorded declines in exports and 41% reported falls in imports. In such circumstances it is no wonder that 42% of those polled are considering layoffs and as many as 37% are thinking of closing down. Therefore, special measures were needed for micro-businesses, primarily by co-financing wages and granting them moratoriums on loan repayments. At the session held on June 29, 2020, the Croatian Employment Service Management Board adopted specific measure in this regard related to micro-entrepreneurs.
The Croatian Employment Service unifies two measures: “Support for preservation of jobs in sectors affected by COVID-19“ HR-2020-12/361 and this measure "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).
Target groups of employers are those who perform economic activity and employ up to 10 workers. Target groups of workers are all insured persons with the eligible employer, regardless of whether they have a permanent or fixed-term employment, including founders, members of the management board, directors, procurators, and business owners. The target group of workers does not include pensioners and foreigners from third countries whose residence and work permits have expired.
Employers who use measures of the Croatian Employment Service (CES) and other organisations, cannot use both measures at the same time. If more than one business entity has the same founder or owner who individually employs less than 10 employees, and all business entities together have more than 10 employees, the support will not be granted.
Employers can choose to suspend contractual obligations under active contracts of active labour market policy (ALMP) measures by CES that include the covering the cost of wages. At the end of the period of application of this measure, they will continue to use the ALMP measure in the remaining period. Employers need to prove that in June 2020 they had a decrease in income by at least 50% compared to June 2019, based on the submission of the VAT form for June 2020 and June 2019. If the employer operates for less than 12 months, it is necessary to prove a decrease in turnover by at least 50% in June 2020 compared to February 2020 based on the submission of the VAT form for June and February 2020.
The monthly amount of the support is HRK 2,000 (€267) for July 2020 per full-time employee, while for part-time employees it is the proportional according to the contractual number of hours.
The support period is July 2020, yet the Administrative Board of the Croatian Employment Service will decide each month on the extension of the measure. The representatives of social partners are members of the Administrative Board of the Croatian Employment Service.
|Does not apply to workers||
One person or microenterprises
||Does not apply to citizens|
Public employment service
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|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:
The representatives of peak organisations of social partners, that are classified as representative, are the members of the Administrative Board of the Croatian Employment Service which is responsible for designing and implementation of the measure.
Social partners are in principle very supportive to all measures prepared for aid of business to stay afloat. Croatian Employers' Association on its web-page informed its members of the new measure, while the attention of the trade unions was more directed to larger employers.
Eurofound (2020), Support for preservation of jobs by micro-entrepreneurs whose economic activity has been disrupted due to a special circumstance caused by Coronavirus (COVID-19) for July 2020 , case HR-2020-27/921 (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.