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Workforce Flexibility and Government Incentives in times of Covid-19 - Czech Republic

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

No

As regards the first question, it is our understanding that the question is aimed at possibilities which would be "automatically" triggered as result of the current emergency state related to COVID-19. Not at measures triggered when other factors are added (such us a heavy drop in demand/production) or those requiring the employee´s consent or those which cannot be implemented immediately but with an advance notice only (such as ordering vacation). In such a case, the answer is No.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

Currently, a set of governmental measures is being prepared and debated. On 19 March 2020 the government shall debate a Targeted Employment Support Program. According to a proposal of the Ministry of Labor, employers whose economic activity is threatened shall be provided with a reimbursement (partial or full) of salaries paid to their employees during impediments to work.Other support measures for businesses shall also be debated shortly by the Czech government. The European Commission has prepared a draft for a temporary release of state aid restrictions.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

The only program already running is a so-called "Covid-19 Loan" by the Czech-Moravian Guarantee and Development Bank (ČMZRB), intended for small and medium-sized enterprises (i.e. enterprises with less than 250 employees and fulfilling some further thresholds regarding turnover and value of assets).

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Where a business has suffered damage due to Covid-19, they can apply for an interest-free "Covid-19 Loan" from ČMZRB. Damage caused by Covid-19 must be proved, e.g. by confirmation of cancelled orders, reservations, drop in daily incomes etc. The loan can be used to cover operation costs, salaries, rent, costs of energy or supplies etc. The request for the loan can be filed electronically here: https://e-podatelna.cmzrb.cz. Currently, the Covid-19 Loan approval procedure is expected to take approximately 2 - 3 weeks from filing the application.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 27 March 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.