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AMENDMENTS TO THE LABOUR CODE AND THEIR IMPACT ON EMPLOYERS AND EMPLOYEES

dan103065 — Tue, 27 Jul 2021 08:17:38 +0000

Choice between meal vouchers and a financial contribution for meals

One of the most significant changes introduced by the amendment to the Labour Code is the possibility for an employee to choose between meal vouchers and a financial contribution for meals. This alternative is an addition to the three existing catering options (i.e. (1) own catering facility, (2) catering facility of another employer, and (3) meal vouchers).

The employee is bound by their selection for a period of 12 months from the date on which the selection is made. The details of the selection process and the implementation of the employer’s obligation to provide meals or a financial contribution for meals on the basis of the employees’ selection may be laid down by the employer in an internal regulation.

Entitlement to meals or a financial contribution for meals arises to employees who work for more than four hours per shift. If the working shift lasts more than 11 hours, the employer may provide the employee with additional meals or an additional financial contribution for meals. The amount of the financial contribution for meals shall constitute the amount which the employer contributes to the meals of other employees, but not less than 55% of the minimum value of the meal voucher. If the employer does not contribute to the meals of other employees, for example, due to not having other employees, the amount of the financial contribution for meals is at least 55% of the minimum value of the meal voucher and no more than 55% of the meal allowance provided for a business trip of 5 to 12 hours.

The employer may still provide the employees with a contribution for meals from the social fund. The financial contribution will be exempt from income tax, as well as social and health insurance contributions.

However, under transitional provisions, an employer who entered into a contract for the provision of meal vouchers with a legal entity or a natural person authorised to arrange catering services prior to 1 January 2022 is obliged to comply with the new legislation only after the end of said contract, but no later than on 1 January 2022. With effect from 1 January 2023, meal vouchers will be provided in electronic form in order to prepare both the companies and the employers for the introduction of the electronic form of meal vouchers.

Temporary assignment of employees

The amendment to the Labour Code also introduced a change in the assignment of employees between the controlling and controlled entity (parent company and subsidiary), whereby the assignment will not be subject to the condition of objective operational reasons on the part of the original employer or the 3-month duration of employment with the employee, after the expiry of which the assignment can be agreed upon, provided that such a temporary assignment is agreed free of charge. However, reimbursement of the costs of the employee’s wage, employer’s insurance contributions and other overhead costs related to the temporary assignment may be agreed upon between the employers, as well as in the event of a temporary assignment between employers who are not controlling and controlled entities.

Definition of an employee permanently caring for a child effective as of 1 January 2022

The Labour Code was amended to include a definition of an employee permanently caring for a child. The definition is important in determining the length of annual leave. The basic requirement is personally caring for a minor child entrusted under a court decision or one’s own minor child; this also includes alternative personal care.

This means, for example, that an employee is entitled to 5 weeks’ leave if they are personally caring for their own minor child, either alone or as part of the alternative personal care provided by both parents. In the case of a divorce, 5 weeks’ leave shall not be granted to an employee who is divorced and the court awarded custody of the child only to the other parent after the divorce. An employee who is cohabiting with a spouse/partner and the spouse’s/partner’s child and the child is neither the employee’s nor is the employee awarded custody of the child shall not be entitled to 5 weeks’ leave.

This role shall commence on the date on which the employee notifies the employer in writing that they are permanently caring for the child and shall cease on the date on which the employee ceases to permanently care for the child. This provision takes effect from 1 January 2022 in order to ensure that the calculation of leave is assessed over a full calendar year.

Domestic work and telework

The basic criterion for determining domestic work and telework is the regularity of performed work outside the employer’s workplace. Domestic work or telework refers to work that could be performed from the employer’s workplace but is instead performed from the employee’s household on a regular basis within the scope of the employee’s weekly working time or a part thereof. Home refers to the agreed place of work outside the employer’s workplace, which may be the place where the employee actually resides or a different place or places agreed upon with the employer. Domestic work or telework must be agreed upon in an employment agreement or in an addendum to the employment agreement.

The amendment to the Labour Code establishes the employees’ right to be offline, the principle of equal treatment of employees working from home and employees working at the employer’s workplace as well as the obligation to inform the employer in case of technical problems. The employer is obliged, inter alia, to provide the employee with compensation, under the conditions laid down in the collective agreement or employment agreement, for the employee’s demonstrable increased expenses associated with the use of the employee’s own tools, equipment, and items necessary for the performance of domestic work or telework.

Extension of the probationary period

Under the amendment to the Labour Code, the employee’s probationary period is extended by the time taken up by all-day obstacles to work on the side of the employee that arose during the probationary period. In the event the employee fails to complete the entire work shift, the probationary period is extended by one day.

New dismissal reason from the employer effective as of 1 January 2022

The employer is entitled to terminate the employment relationship even when the employee has reached the age of 65 years and has also reached the age eligible for a retirement allowance (both conditions have to be met concurrently).

More part-time opportunities for persons over the age of 15

With the permission of the Labour Inspectorate, employers will now also be able to employ persons over the age of 15 who have not yet completed compulsory schooling to perform light work. This measure provides opportunities for summer jobs to those who have completed their first year of secondary school.

Status of a secondary school student or a university student valid until 31 October

The amendment to the Labour Code also regulates the status of students. Under the amendment, the student status of secondary school students and university students will be valid until 31 October of the relevant calendar year in which they completed their studies. This measure introduces the possibility for students to work during the summer holidays on the basis of a student work agreement.

Dispute over the operation of a trade union with the employer

The operation of a trade union at a workplace is also to be amended. The employer is obliged to allow trade unions to operate at the workplace only if there are union members among the employees. Dispute over the operation of a trade union with the employer occurs when the employer or the trade union operating with the employer have doubts as to whether the trade union (which informed the employer in writing about their operation) has a presence among the employer’s employees.

Such a dispute shall be resolved by an arbitrator agreed upon by the employer and the trade union or appointed by the Ministry of Labour, Social Affairs and Family of the Slovak Republic. Both parties are obliged to provide the arbitrator with a list of employees or a list of members of the trade union who are employees of the relevant employer. The arbitrator must notify both parties of the outcome of the dispute within 30 days of the commencement of the dispute resolution.

Príspevok AMENDMENTS TO THE LABOUR CODE AND THEIR IMPACT ON EMPLOYERS AND EMPLOYEES je zobrazený ako prvý na Moore BDR s. r. o..

Proposals for legislative amendments

dan103065 — Mon, 19 Jul 2021 11:54:35 +0000

Below is a summary of the latest news on the upcoming amendments to the Labour Code (i.e. amendment to Act No. 311/2001 Coll.) and the Tax Code (i.e. amendment to Act No. 563/2009 Coll. on Tax Administration). In addition to the Tax Code, the amendment to the Tax Code should also amend the Income Tax Act (i.e. amendment to Act No. 595/2003 Coll.) and the Value Added Tax Act (i.e. amendment to Act No. 222/2004 Coll.).

Amendment to the Labour Code – Changes to meal vouchers and other measures regarding sole proprietors

Soon after entering into force, the March 2021 amendment to the Labour Code had to undergo further legislative amendment. At the June session of the National Council of the Slovak Republic, an amendment to the Labour Code underwent the first reading. This amendment set out to regulate a number of contentious points.

Below you can find several unaddressed issues regulated by the submitted proposal.

The amount of the meal allowance is adjusted – the employer will be able to grant employees up to 100% of the amount of the meal allowance provided for a business trip lasting 5 to 12 hours instead of the current statutory 55% (i.e. currently no more than EUR 2.81). This applies to each of the statutory meal forms. This increased allowance up to a value of EUR 5,10 is exempt from personal income tax and social security contributions and is considered a tax-deductible expense for the employer.

Less red tape and payment in arrears – the practice has shown complications in the advance payment of meal allowance while maintaining the purpose of the contribution. In order to eliminate these complications, the amendment introduces the possibility to provide meal vouchers and financial contribution in arrears for the previous calendar month. This measure should eliminate problems with the meal entitlement calculation which could not have been taken into account (e.g. unplanned leave, sudden termination of employment).

Measures regarding sole proprietors and other self-employed individuals – sole proprietors will be able to claim EUR 5.10 for meals for each working day. In addition, the obligation to document the amount of meal expenses will be abolished.

Once the amendment to the Act is approved by the National Council of the Slovak Republic, as presented, it will enter into force on 1 January 2022.

After the first reading in June, the following parliamentary session is scheduled to take place in September after the summer break. We will continue to closely monitor the legislative process regarding this field and will keep you informed of any changes.

Amendment to the Tax Code

On 26 April 2021, the Ministry of Finance of the Slovak Republic submitted a draft amendment to the Tax Code to the interdepartmental consultation procedure. It was drafted on the basis of the government policy statement and proposes a number of measures.

Abolition of registration certificates and reduction of the fee for a binding opinion.

As part of the measures to foster entrepreneurship, it is proposed to abolish the so-called “registration certificates” as well as the related obligation to submit them to the tax administrator for the purpose of registering changes. The obligation to return the certificate is also to be abolished.

The amendment also proposes to reduce the fee for binding opinions. Upon filing a request for a binding opinion, the taxpayer will pay the amount of EUR 1,000. A highly reliable taxpayer, on the other hand, will pay half this amount upon filing a request. This is the amount per one opinion.

Tax reliability index

The draft amendment to the Tax Code also proposes to introduce a tax reliability index. This index is to be used as a transparent and objective rating of taxpayers based on the fulfilment of their obligations towards the Financial Directorate. In case of disagreement with the rating, the taxpayer will be entitled to lodge an objection within 15 days of the date of receipt of the notification. In case of an excellent rating, taxpayers will be entitled to certain benefits, e.g. longer deadlines for response to the tax administrator or for the submission of documents, reduction of the fee for a binding opinion by half. On the other hand, unreliable taxpayers will receive the so-called “malus”, e.g. shortening the deadline for fulfilling obligations in the tax proceedings to 8 days.

Exclusion of a natural person

To combat tax fraud, the forthcoming amendment proposes to introduce the exclusion of a natural person. This amendment will enable tax administrators to issue a decision on the exclusion of a natural person, who is the statutory body of a taxpayer or a member of the statutory body and seriously violates their tax obligations.

The consequence of the decision on the exclusion is that the excluded natural person, who is the statutory body or a member of the statutory body, must not act as the statutory or the supervisory body in a company or a cooperative.

The tax administrator will issue an exclusion order of the taxpayer if the taxpayer:

completed tax audit and has tax arrears or arrears of other monetary benefits totalling at least EUR 5,000 for more than one year, or
submitted value-added tax returns for the tax year and the tax audit ascertaining the eligibility of the claim relating to that tax year was completed.

The natural person is to be excluded from the date on which the decision on the exclusion becomes final and the exclusion period shall be three years from the date on which the decision becomes final.

Summary protocol

The provision regulating the summary protocol is abolished due to it not being used in practice.

Summoning and presentation

It is proposed to stipulate that those who are summoned must present evidence, in addition to an excuse, about their inability to participate in the requested tax administration activity for serious reasons.

Evidence

Tax administrators may also carry out the so-called joint actions for the purpose of taking evidence. These include oral hearings, examination of witnesses, examination of experts, familiarisation with relevant facts established by other tax subjects and familiarisation with means of evidence. The main purpose of this amendment is to reduce the time it takes to carry out the inspection and to increase its efficiency.

It is also proposed to allow the examination of witnesses and experts to be carried out by video conference or by other means of communication technology.

Procedure for determining tax with the help of aids

It is proposed to modify the delivery of the tax determination protocol with the help of aids, as is already the case with the tax inspection protocol, where the notice is part of the aforementioned protocol, thus ensuring a more efficient way of delivery, particularly in the case of electronic delivery.

Extinction of tax arrears

Following the amendments to the “personal bankruptcy” institute in the Act on Bankruptcy and Restructuring, it is proposed to clarify the provisions on the extinction of tax arrears in the event of payment of debt.

The extinction applies to unenforceable tax arrears resulting from the bankruptcy of a natural person, where the extinction of tax arrears will apply to unenforceable tax arrears, both in the case of bankruptcy declared under Article 4 of the Act on Bankruptcy, as well as in the case of bankruptcy declared on the property of a natural person under Article 2 of the Act on Bankruptcy (i.e. Act No. 7/2005 Coll.) and in the case of payment of debt carried out in the context of the provision of Section 206f(4) of the Act on Bankruptcy.

In practice, there have been cases where tax debtors have failed to submit tax returns within the deadline stipulated under the law, resulting in the initiation of the restructuring proceedings and the authorisation of restructuring. In the event a tax debtor submitted tax returns after the restructuring procedure has been initiated and a tax obligation has arisen which became due prior to the initiation of the restructuring procedure, this constitutes tax arrears corresponding to a claim for the purposes of the restructuring. The tax administrator was no longer able to declare the tax arrears in question because the deadline for declaring restructuring claims had expired.

It is precisely due to the objective impossibility of the tax administrator to declare the tax arrears as a restructuring claim that it is necessary to stipulate that such tax arrears do not cease to exist in so far as they result from the tax returns if the deadline for the submission of the tax returns expired prior to the initiation of the restructuring procedure, yet the tax returns have not been submitted prior to the initiation of the restructuring procedure. It is also proposed to consider such tax arrears as a claim arising after the initiation of the restructuring procedure.

Bank accounts submission and liability for the payment of VAT

An amendment is proposed under which the taxpayer in receipt of a taxable transaction should or may have known that another domestic taxpayer would not pay the entire tax amount.

The tax guarantee will also apply in cases where the consideration for the supplied goods or services is paid to the supplier’s bank account that does not feature on the list of bank accounts published by the Financial Directorate of the Slovak Republic.

The amendment to the Value Added Tax Act introduces the possibility for taxpayers to verify whether they pay the consideration to the bank account of the supplier that was submitted to the Financial Directorate. Under the amendment, a notification obligation is introduced, whereby taxpayers must use the electronic form published on the Financial Directorate website to submit the details of their bank accounts used for their business activities that should be subject to VAT.

A list of the submitted bank accounts will be published and updated on a daily basis by the Financial Directorate of the Slovak Republic. In the event that the customer who is a taxpayer sends the payment for goods or services to an account that was not submitted, the taxpayer in question may face the risk of being held liable for VAT on said transaction provided that their supplier fails to pay this VAT themselves.

However, it will be possible for the customer to eliminate the risk of being held liable for the payment of VAT. If the customers fear that the Financial Directorate may hold them liable, they will be able to split the payment and pay the amount of VAT directly to the bank account of their supplier of goods or services held with the tax authorities. In this case, the tax administrator will no longer require the customers to pay the amount of VAT unpaid by their supplier.

New information lists published on the Financial Directorate portal

Three new lists are to be published on the Financial Directorate website.

Two lists are proposed to be published in connection with the new liability legislation amendment to the Value Added Tax Act. The first one concerns the submitted bank accounts of VAT payers and the second one regards bank account numbers of taxpayers held with the tax authorities (the so-called OÚD, i.e. the taxpayer’s personal account).

With regard to the introduction of the so-called public tax reliability index, it is proposed that the taxpayers and their indexes are published by the Financial Directorate of the Slovak Republic in its new (third) list.

These lists are to be published and regularly updated by the Financial Directorate of the Slovak Republic on its website.

The amendment is expected to take effect on 1 January 2022. The deadline for the announcement of bank accounts is proposed to be on 30 November 2021. All VAT payers registered as of 15 November 2021 will be thus required to notify the tax authorities of all their bank accounts used for business activities by 30 November 2021.

The consultation procedure ended on 14 May 2021 and the draft amendment was submitted to the government office on 29 June 2021, where it will be discussed by the members of parliament. We will continue to closely monitor the legislative process regarding this amendment and will keep you informed of any changes.

Should you have any questions on the upcoming changes concerning the amendments to the Labour Code and the Tax Code, please do not hesitate to contact us.

Príspevok Proposals for legislative amendments je zobrazený ako prvý na Moore BDR s. r. o..

Labour Code Amendment

dan103065 — Mon, 06 Apr 2020 12:10:48 +0000

On 2 April 2020, the Slovak Parliament adopted a draft Labour Code in order to make the following changes applicable at the time of the declaration of the state of emergency/extraordinary situation (hereinafter referred to as the “crisis”) and for the two months until the crisis is recalled:

The possibility of working from home, if the nature of the work so permits.
Shortening of the employer’s obligation to announce the organisation of the working time from a week to two days with a validity period of no less than a week. It is further proposed that the employer should be able to use the hours for which an employee was provided wage compensation due to an obstacle to work on the part of the employer so that the employer may use these hours instead of ordering the employee to work overtime in the future. The scope of such time should not exceed the amount of overtime work, i.e. 400 hours per calendar year.
In the case of leave-taking, the employer’s obligation to notify in advance will be shortened to 7 days and in the case of leave carried over from previous years to two days.
The employer will excuse the absence of employees subject to quarantine or isolation and such employees shall not be entitled to wage compensation during this time. Such employees shall also be temporarily recognised as incapable of work – the so-called pandemic leave.
If an employee is unable to perform work in whole or in part due to interruption or limitation of an employer’s activity based on the discretion of the competent authority or due to restriction of a business as a result of the crisis, this shall be considered an obstacle to work on the part of the employer, where employees will be compensated with a wage of 80% of their average earnings, but at least equal to the minimum wage.
The support period for receiving employment benefit will be extended by one month for policyholders whose support period ends in the midst of the crisis.
Further changes were also introduced in the Act on Occupational Health and Safety pertaining to the notification duty upon recruitment of a new employee or reassignment of an employee to another workplace.

The Act can be read in full in the following document:

Labour Code Amendment, as amended and supplementing certain acts

Príspevok Labour Code Amendment je zobrazený ako prvý na Moore BDR s. r. o..

Act No. 390/2019 Coll. – amendment of the Commercial Code and the Commercial Register Act

dan103065 — Thu, 09 Jan 2020 11:22:36 +0000

Commercial Register

The amendment of the Commercial Code and the Commercial Register Act amends numerous provisions. One fundamental change is the fact that petitions to the commercial register can now essentially only be filed electronically (if a document cannot feasibly be filed electronically given the nature of the document or its size, then paper form is still acceptable. In such case, the petitioner shall attach a written statement to their petition for registration in which they specify the reason for which the document could not be filed electronically together with the petition itself.

Inactive companies will also be expunged and there are changes to the mandatory data reported in the Commercial Register itself. Under the new legislation, the Commercial Register will contain specification of if a legal entity was established for a fixed period of time and if so, until when. The date of birth and birth number for each partner will now be entered in the Commercial Register along with their first and last name and place of residence. A natural person authorised to act on behalf of a legal entity must provide such new identification details for the partners and register them in the Commercial Register by 30 September 2021 at the latest.

A list of entities to be expunged from the Commercial Register will be published by the Ministry of Justice of the Slovak Republic for a period of six months in the Commercial Bulletin. These entities include those who failed to convert the nominal value of contributions and the nominal value of their registered capital from the Slovak currency to the Euro.

Consent to the use of property

Legal entities register a registered office in the Commercial Register. They must have either title, the right to use such property (rentals and leases) or consent from the owner of the property to use the property as its registered office in the Commercial Register. As a result of this amendment, written consent to register the property as a registered office in the Commercial Register will require an officially certified signature.

Sole proprietors

The amendment of the Commercial Code and the Commercial Register Act stipulates the establishment and dissolution of business permits for foreign sole proprietors. If a foreign sole proprietor doing business in Slovakia was registered in the Commercial Register in any European Union member state or a member state of the Organisation for Economic Co-operation and Development, they did not need to be registered in the Commercial Register of the Slovak Republic.

Based on the amendment of the Commercial Code, such foreign sole proprietors conducting business activities in Slovakia will have to have a proper trade license.

The amendment to the Commercial Code stipulates that the authorisation of a foreign entity to do business in Slovakia is established on the creation date of their trade license and terminates on the expiration date of their trade license.

Sole proprietors are not registered in the Commercial Register. Those sole proprietors registered in the Commercial Register will be expunged.

Persons subject to distraint proceedings

As a result of the amendment, a person registered who is an obliged party in the register of issued distraint authorisations will not be permitted:

to acquire an ownership interest in a limited liability company,
to transfer their ownership interest in a limited liability company to another partner or other person,
to be nominated as the managing director of a limited liability company (and therefore those persons nominated to be managing director and not those who are already managing director),
to establish a limited liability company (in such case, this person may also not be registered in the list of taxpayers in arrears or otherwise have arrears with the Social Insurance Administration).

Restrictions on the actions of the statutory body are not registered in the Commercial Register

If an entrepreneur is involved in registering with the Commercial Register, any restrictions involving the statutory body are not registered in the Commercial Register.

Natural persons authorised to act on behalf of a registered entity with restrictions on the statutory body’s authorisation to act on behalf of the legal entity under the legislation in force until 30 September 2020 must align their registration in the Commercial Register with the Commercial Code when filing their next petition to register changes in registered data or by 30 September 2021 at the latest.

Company in crisis

A company at risk of bankruptcy is considered in crisis, and specifically this is defined as a situation where the ratio of equity to liabilities is less than 8 to 100. Under the amendment of the Commercial Code, a company in crisis includes a company from the time of its dissolution until it enters into liquidation.

The amendment of the Commercial Code also expands the definition of companies who may not be classified as in crisis, including collective investment entities, payment system operators, pension management companies, supplemental pension companies, payment institutions and creditors with license to provide consumer credit regardless of scope.

Court-ordered dissolution of companies for failure to submit financial statements

One important change is the court-ordered dissolution of a company they fail to meet their obligation to file their financial statements with the documentation archive.

Currently, failure to comply with the obligation to file financial statements with the documentation archive is only punishable by dissolution of the company if the company violates this obligation for a minimum of two consecutive periods. After the amendment, the court-ordered dissolution of a company will be permitted if the company is more than six months in default with filing its financial statements with the documentation archive.

Company liquidation

Liquidation is focused on satisfying the claims of creditors and other parties with a claim to part of the liquidation balance.

The amendment further specifies aspects of the liquidation process and defines the role of the liquidator, who is now involved in the event of the liquidation of a company’s statutory body. Liquidators will be appointed by a relevant company body or a court.

The requirement to provide an advance payment for liquidation is being introduced. The advance payment is intended to function as security towards the liquidator’s compensation and reimbursement for their costs. The amendment, inter alia, stipulates the procedure for reporting receivables in the liquidation process in a much more detailed and principled manner, and the list of reported receivables, which must be submitted to the documentation archive.

A company enters into liquidation on the liquidator’s petition to the Commercial Register, whereby the business name of the company with the phrase “in liquidation” is used to refer to it until such time that the liquidation is complete. Under the new amendment, the liquidation of a company will no longer be as simple and the process itself will be much more formalised.

Ex-post liquidation

The amendment of the Commercial Code and the Commercial Register Act stipulates the method of ex-post liquidation if a company is determined to still hold property that should be included in liquidation or bankruptcy after it is expunged from the Commercial Register. The phrase “in ex-post liquidation” would then be added to the business name in this case. If a petition for ex-post liquidation is not filed within four years from the expunging of the company from the Commercial Register, title to the company’s residual property transfers to the state.

Disposal of company property after dissolution

Special stipulations are introduced to cover the period from the dissolution of a company to its entry into liquidation. If the value of the company’s property exceeds 10% of the value of the company’s registered capital, the disposal of company property is subject to appraisal by an expert and approval by the company’s supreme body.

Conclusion

Essential portions of the amendment of the Commercial Code and the Commercial Register Act are scheduled to take effect on 1 October 2020. The Commercial Code and Commercial Register Act are set to undergo significant changes. Essentially, the Commercial Register will only accept electronic filings and inactive companies will be expunged as a result of the amendment. Companies will have to enter the date of birth and birth number for each partner in the Commercial Register as well. Persons who are subject to distraint proceedings will have a limited ability to do business through a limited liability company. The amendment significantly amended the formal process of liquidating a company and the tasks assigned to the liquidator.

Please be aware that the details above only provide a brief summary of the adopted amendment to the Commercial Code and the Commercial Register Act and do not represent a legal interpretation. The purpose of this summary is to inform you of the fundamental changes and some of the new obligations vis-a-vis the Commercial Register, especially the obligation to align data. If you find it necessary, we’d be happy to provide you with more information concerning this amendment or provide legal counsel, especially in relation to the newly created changes and obligations.

Príspevok Act No. 390/2019 Coll. – amendment of the Commercial Code and the Commercial Register Act je zobrazený ako prvý na Moore BDR s. r. o..