WHAT ASSISTANCE IS AVAILABLE?
The Anti-Crisis Shield generally makes the following forms of assistance available:
- for the self-employed: three-month ZUS contribution exemption, standstill benefits, partial business cost support and Labour Fund loans;
- for microenterprises: three-month ZUS contribution exemption and Labour Fund loans;
- for other businesses: measures including employee wage support, reduced working hours and pay, and partial ZUS exemption where between 10 and 49 persons are registered for social insurance.
WHAT MUST I DO TO RECEIVE ASSISTANCE?
First, check whether you meet the eligibility conditions. The steps depend on the support sought. In most cases, submitting an application to the competent authority on its published forms is sufficient.
IS THE SHIELD ONLY FOR THOSE WHOSE SITUATION WORSENED IN MARCH? WHAT IF MINE WORSENED IN APRIL OR WILL WORSEN IN MAY?
The Shield helps those who suffered losses because of COVID-19. A business whose situation worsens in April or May may still use its measures, subject to meeting the specified requirements.
DO I LOSE ACCESS TO SELF-EMPLOYED SUPPORT IF I EMPLOY SOMEONE?
A business employing even one person is treated as a microenterprise under the Shield. It cannot use instruments reserved for the self-employed but retains access to measures for microenterprises with employees. For example, a business employing and registering another person for insurance, whether under an employment contract or a contract of mandate, uses the three-month ZUS exemption for microenterprises rather than the self-employed option.
CAN ZUS REJECT A CONTRIBUTION EXEMPTION APPLICATION BECAUSE OF ARREARS?
The provisions do not state that having no contribution arrears is a condition for exemption. At present, however, it is impossible to predict how the granting authorities will interpret them.
DOES ZUS EXEMPTION ALSO COVER EMPLOYEES HIRED AFTER 1 FEBRUARY 2020?
The ZUS contribution measures impose no length-of-service requirement, but require registration for insurance:
- before 1 February 2020 and on 29 February 2020;
- between 1 and 29 February 2020 and on 31 March 2020;
- between 1 and 31 March 2020 and on 30 April 2020.
IS THERE A REVENUE THRESHOLD FOR ZUS EXEMPTION? HOW SHOULD REVENUE BE CALCULATED?
In the first month of exemption, self-employed revenue cannot exceed 300% of the forecast average monthly gross wage in the national economy for 2020, namely PLN 15,681.
For ZUS exemption, revenue is understood for income tax purposes: net revenue before income tax.
I AM A SOLE TRADER AND ALSO A PARTNER IN A PARTNERSHIP. HOW SHOULD I CALCULATE AND REPORT REVENUE WHEN APPLYING FOR ZUS EXEMPTION?
Partners in registered, professional and limited partnerships, as well as shareholders in single-member limited liability and joint-stock companies, are treated as entrepreneurs under the Shield. A person who, for example, is a limited partnership partner and also runs a business should therefore total revenue from both sources for the month.
DID SHIELD 2.0 REMOVE THE REVENUE CAP FOR ZUS CONTRIBUTION EXEMPTION?
The cap for self-employed persons was not removed. Although reported in the media, the amendment that would have removed it was not adopted by the Sejm.
MUST BUSINESSES REGISTERING EMPLOYEES FOR INSURANCE ALSO MEET THE REVENUE THRESHOLD TO OBTAIN EXEMPTION?
No. Eligibility for businesses employing staff does not depend on the revenue requirement. That requirement applies to sole traders.
Businesses registering between one and nine employees receive full exemption for March, April and May 2020. Those registering between 10 and 49 employees receive exemption from 50% of total contributions due for those months. Insured employees who are minors are excluded from the headcount for this Shield measure.
SHOULD I PAY ZUS CONTRIBUTIONS IF I WANT TO APPLY FOR EXEMPTION? WHAT IF MARCH’S CONTRIBUTIONS HAVE ALREADY BEEN PAID?
Do not pay before receiving the decision: any payment should await ZUS’s decision. Apply by 30 June 2020. Settlement documents for March–May 2020 must be filed within statutory deadlines, according to ZUS by 30 June 2020, unless the payer is legally exempt from filing them.
The rules now allow full or partial exemption even where March contributions have already been paid. The Act states that such payments are refundable.
I USE START-UP CONTRIBUTION RELIEF. CAN I OBTAIN CONTRIBUTION EXEMPTION AND A STANDSTILL BENEFIT?
In defining an eligible self-employed payer, the legislature refers to someone ‘paying contributions solely for their own social insurance or health insurance’. The inclusive ‘or’ could suggest that start-up relief recipients also qualify. However, the Shield refers here to the definition of non-agricultural activity in the Social Insurance System Act, which excludes start-up relief recipients. ZUS takes the same view, stating that those exempt from social insurance contributions for six months under start-up relief cannot apply for ZUS contribution exemption.
Remember the tax consequences: unpaid contributions cannot be deducted from tax. Any health contribution exemption for start-up relief recipients would therefore be largely illusory, as much of the saving would instead be paid as income tax. Potential savings are consequently modest, while the risk of being deemed late in paying contributions and the resulting consequences are substantial.
There is no obstacle to start-up relief recipients applying for a standstill benefit.
HOW IS THE STANDSTILL BENEFIT CALCULATED?
The benefit is a fixed PLN 2,080, or 80% of the minimum wage. If total revenue from civil-law contracts, as defined for PIT, in the month preceding the application is below 50% of the 2020 minimum wage, the benefit equals the total remuneration under those contracts. Those using the tax card PIT scheme and exempt from VAT receive PLN 1,300, or 50% of the minimum wage.
ARE TAX CARD TAXPAYERS ENTITLED TO A STANDSTILL BENEFIT?
Taxpayers using the tax card income tax scheme and exempt from VAT may receive the benefit. Certain eligibility requirements do not apply to them.
I RUN A BUSINESS AND RECEIVE THE MINIMUM RETIREMENT PENSION. AM I ENTITLED TO A STANDSTILL BENEFIT?
Receiving a pension did not in itself constitute a separate basis for social insurance or exclude entitlement to the standstill benefit. A pensioner running a business could apply if the other conditions under the rules then in force were met. Health insurance had to be distinguished from social insurance arising on another basis.
CAN I APPLY FOR BOTH A STANDSTILL BENEFIT AND A LABOUR FUND LOAN?
Yes. There is no obstacle to using both forms of support.
WHAT DOES ‘STANDSTILL’ MEAN?
Standstill means an employee cannot work for reasons beyond their control despite being ready to do so. Where an employee works fewer hours, reduced working time is a useful instrument.
WHAT IS AN EMPLOYEE ENTITLED TO IF THE WORKPLACE CLOSES?
If the workplace closes because of COVID-19, employees unable but ready to work retain their pay entitlement. Their pay may, however, be reduced because of standstill on an appropriate legal basis.
MUST I MAINTAIN EMPLOYMENT WITHOUT EXCEPTION IF I APPLY FOR GUARANTEED EMPLOYEE BENEFITS FUND SUPPORT?
The Shield expressly makes certain provisions of the Act on Special Job Protection Measures applicable to these benefits. They prohibit dismissal for reasons unrelated to the employee during funding and for an immediately following period equal to the funding period, capped at three months. In our view, termination for employee-related reasons, such as poor performance or disciplinary dismissal, should therefore pose no problem, nor should resignation or termination by mutual agreement.
I AM, OR EMPLOY, A UKRAINIAN CITIZEN IN POLAND UNDER VISA-FREE TRAVEL. WHAT IF THE PERMITTED 90-DAY STAY ENDS DURING THE EPIDEMIC OR EPIDEMIC THREAT?
If a Ukrainian citizen’s lawful visa-free stay ends during the epidemic or epidemic threat declared to combat coronavirus, they may remain in Poland provided they apply for a temporary residence permit no later than the end of the 30th day after the last such state is lifted.
These answers do not constitute legal advice. Determining whether, to what extent and how a particular business can use Anti-Crisis Shield measures requires a detailed analysis of its legal position in every case..
We will endeavour to answer more questions in subsequent articles in the ANTI-CRISIS SHIELD: FREQUENTLY ASKED QUESTIONS series.
We also invite you to download part two of our practical guide to the measures introduced by the legislation known as Anti-Crisis Shield 2.0, available here.
