With the state of emergency announced by the President of Romania and the evolving situation in Romania regarding the spread of the COVID-19 virus, we have entered a new phase. Schools will remain closed until after Easter, according to a statement from the Ministry of Education, and on Saturday, March 14th, President Klaus Johannis signed the decree for promulgating the law that grants parents paid leave for supervising children in the event of temporary school closures. Additionally, Romanian authorities are preparing for the application of the so-called “scenario 3” of the crisis.
Most multinational companies have adopted the “work from home” and “telecommuting” methods, while some local businesses are limiting their presence to the online environment only. For some of the most affected sectors during this period, technical unemployment might seem like an alternative.
What is Technical Unemployment?
Technical unemployment refers to the suspension of an employer’s activity based on Article 53 of the Labor Code, due to economic, technological, structural, or other similar reasons. Technical unemployment can only be initiated by the employer, citing the reasons mentioned above.
How Can Employers Invoke Technical Unemployment?
In the current particular situation, employers can resort to technical unemployment by citing the temporary suspension of activity caused by the highly atypical economic context or situations where one or more of their employees are suspected of being infected with the coronavirus, or are in quarantine or self-isolation at home, and therefore cannot perform their job duties. If employers decide to implement technical unemployment, they must provide evidence of the temporary suspension of activity to justify the payment of the indemnity for the respective period.
In such cases, employees whose employment contracts are suspended cannot apply for unemployment benefits, as they are already receiving an indemnity from their employer.
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How is Technical Unemployment Applied and What is the Indemnity?
The employer can place employees on technical unemployment, which requires the suspension of individual employment contracts. Employees whose individual employment contracts have been suspended are entitled to an indemnity of 75% of the base salary corresponding to their job position. This indemnity is paid from the salary fund.
In cases of temporary activity reduction, due to economic, technological, structural, or similar reasons, for periods exceeding 30 working days, the employer may reduce the work schedule from 5 days to 4 days per week, with a corresponding salary reduction, until the situation that caused the schedule reduction is remedied, after prior consultation with the representative union at the unit level or the employees’ representatives, as applicable.
What Happens to Employees on Technical Unemployment?
In exchange for ensuring the payment of the 75% indemnity of the base salary corresponding to their job, employees remain at the disposal of the employer, who can at any time decide to resume activity.
What Taxes Are Paid for Technical Unemployment?
– Employee’s health insurance contribution;
– Employee’s social insurance (pension) contribution;
– Income tax;
– Work insurance contribution.