Ladies and Gentlemen,
due to the COVID-19 epidemic in our country, the legislator is developing the so-called anti-crisis shield, i.e. a package of legal provisions aimed at introducing legal solutions related to the current situation in the country.

In this alert, we present the most important assumptions of the draft act amending the act on special solutions related to the prevention, counteraction and combating of COVID-19, other infectious diseases and crisis situations caused by them, and certain other acts.

At the same time, we would like to assure you that we are constantly monitoring the legislature's work on legal solutions that will benefit entrepreneurs, employees, and others affected by the negative effects of the current epidemic. We are at your disposal if you have any questions.

Solution for entrepreneurs

Possibility to apply for benefits to protect jobs

Under the draft law, businesses will have the right to apply for benefits to protect jobs, requesting payment from the Guaranteed Employee Benefits Fund to subsidize the salaries of employees affected by economic downtime or reduced working hours as a result of COVID-19. This solution is intended to cover not only employees working under employment contracts, but also contractors and the self-employed.

To be able to use this solution, the company must experience economic downtime or reduced working hours.

In the event of economic downtime, employee remuneration is to be co-financed from the Guaranteed Employee Benefits Fund, up to 50% of the minimum wage determined on the basis of the minimum wage regulations.

In turn, in the event of a decline in economic turnover (within the meaning of this Act) and a reduction in working time by a maximum of 20% (but not more than 0.5 full-time employment), the remuneration is to be co-financed from the Guaranteed Employee Benefits Fund up to half of the employee's remuneration, but not more than 40% of the average monthly remuneration from the previous quarter announced by the President of the Central Statistical Office on the basis of the provisions on pensions and disability pensions from the Social Insurance Fund, applicable on the day of submitting the application for the benefit.

The employer is obliged to establish the conditions and procedure for performing work during periods of economic downtime or reduced working hours in a collective agreement or in consultation with company trade unions or employee representatives (if there are no trade unions operating at the employer).

Importantly, the discussed solution will be available to an entity for which there are no grounds for declaring bankruptcy referred to in Article 11 or Article 13 section 3 of the Act of 28 February 2003 - Bankruptcy Law (Journal of Laws of 2017, item 2344, as amended) and which has no arrears in settling tax liabilities, social security contributions, health insurance, the Guaranteed Employee Benefits Fund, the Labor Fund or the Solidarity Fund by the end of the third quarter of 2019.

Entitlement to benefits may be established for a total period of three months following the date of signing the agreement. The speed of application and documentation preparation will be crucial, as applications will be considered until the funds allocated for this solution are exhausted.

A solution for people with disabilities

Maintaining the validity of disability decisions

The draft act assumes that if, for reasons related to counteracting COVID-19, a disability certificate or a disability degree certificate issued for a specified period under the Act of 27 August 1997 on vocational and social rehabilitation and employment of disabled persons, the validity of which expires within 30 days from the date of entry into force of the discussed act, it shall remain valid for another period of 90 days from the date of expiry of the validity of that certificate, but no longer than until the date of issuing a new disability certificate or disability degree certificate.

However, if within 30 days before the entry into force of the discussed Act, an application is submitted for the issuance of another certificate confirming disability or the degree of disability, referred to in the Act of 27 August 1997 on vocational and social rehabilitation and employment of disabled persons, the certificate of disability or the degree of disability will remain valid for another period of 90 days from the date of expiry of the validity of that certificate, but no longer than until the date of issuance of a new certificate of disability or a decision on the degree of disability.

A solution for travelers and tour operators

Possibility of terminating or withdrawing from a tourist trip contract by operation of law

The bill provides a solution for individuals who have concluded contracts to which the provisions of the Act of November 24, 2017, on package travel and related tourist services apply (i.e., of February 22, 2019, Journal of Laws of 2019, item 548, as amended). These will include, for example, contracts concluded with travel agencies. The travel agent will have the right to withdraw from the contract, and the organizer will have the right to terminate it, if this is directly related to the outbreak of the SARS-CoV-2 virus epidemic. In such a case, notification of withdrawal or termination of the contract is required. In such a case, it is necessary to notify the other party of this fact. The termination or withdrawal from the contract will take place after 180 days from the date of notification to the other party.

Note: Withdrawal from the contract or its termination in the manner described above will not be effective if the traveller agrees to receive in return a voucher from the tour operator to be used for future tourist events within one year from the date on which the tourist event was to take place.

A solution for entrepreneurs

Possibility of exemption from property tax by the Commune Council

Due to the negative economic consequences of COVID-19, the Municipal Council will have the authority to adopt a resolution exempting land, buildings, and structures related to business operations from property tax for part of 2020 for a designated group of entrepreneurs whose financial liquidity has deteriorated. Furthermore, the Mayor (Mayor, City President), by order, will have the authority to extend the payment deadlines for property tax installments due in April, May, and June 2020 for designated groups of entrepreneurs whose financial liquidity has deteriorated as a result of COVID-19, no longer than until September 30, 2020.

A solution for entrepreneurs

Exemption from tax on civil law transactions (PCC) for loan agreements

The draft act provides for an exemption from tax on civil law transactions for loan agreements concluded until August 31, 2020, if the borrower is an entrepreneur within the meaning of Article 4, paragraph 1 or 2 of the Act of March 6, 2018 - Entrepreneurs' Law, whose financial liquidity has deteriorated due to negative economic consequences due to COVID-19.

A solution for some employers

During the period of an epidemic threat or epidemic state, the employer has the right to make changes to the work organization and order overtime work.

For a fixed period of time, not longer than until the state of epidemic threat or epidemic is lifted, the employer will be entitled to:

1. changing the system or distribution of employees' working time in a manner necessary to ensure the continuity of the operation of the enterprise, station or office;
2. instructing employees to work overtime to the extent and to the extent necessary to ensure the continuity of the operation of the enterprise or station.

The solution from point 1 above may be applied by employers employing employees:

1. in an enterprise conducting business activities consisting in ensuring the functioning of critical infrastructure systems and facilities within the meaning of Art. 3 point 2 letters a, c, f, h and k of the Act of 26 April 2007 on crisis management (Journal of Laws of 2019, item 1398 and of 2020, items 148, 284 and 374);
2. in an enterprise that is a subcontractor or supplier who are not part of the critical infrastructure referred to in point 1, but are crucial for maintaining the continuity of operation of the critical infrastructure;
3. ensuring the operation of liquid fuel stations within the meaning of Art. 3 item 10h of the Act of 10 April 1997 - Energy Law (Journal of Laws of 2019, item 755, as amended) and natural gas stations within the meaning of Art. 2 item 26 of the Act of 611 January 2018 on electromobility and alternative fuels (Journal of Laws of 2019, items 1124, 1495, 1527 and 1716 and of 2020, item 284);
4. at an entrepreneur in relation to whom the Prime Minister has issued an order regarding counteracting COVID-19.

A solution for foreigners staying in Poland

Extension of the legality of stay in Poland

The bill provides that if the deadline for submitting an application for a temporary residence permit, referred to in Article 105 paragraph 1 of the Act of December 12, 2013 on Foreigners (Journal of Laws of 2020, item 35), falls during the period of an epidemic threat, or in the event of a state of epidemic being declared – during its period of validity, announced in connection with SARS-CoV-2 virus infections, the deadline for submitting the application is extended until the 30th day following the date of cancellation of the state of epidemic threat or state of epidemic, respectively. If the foreigner submits an application within this deadline, their stay in the territory of the Republic of Poland is considered legal. This solution is to apply accordingly to the deadlines applicable to permanent residence permits and long-term resident's European Union residence permits.

A solution for entrepreneurs

Possibility of deferring the payment deadline or paying in installments ZUS contributions for the period from 1 January 2020 without paying an extension fee

ZUS does not impose a prolongation fee on the entrepreneur in the event of a deferment of the payment deadline or payment by instalments of ZUS contributions due for the period from 1 January 2020, on the basis of an application submitted during the period of the state of epidemic threat or within 30 days after its cancellation, and in the event of the announcement of the state of epidemic - during its validity or within 30 days after its cancellation.

A solution for entrepreneurs

Reduction of the rent amount due to the restriction or prohibition of conducting business in a commercial facility

This solution applies to businesses prohibited or restricted from operating in a retail facility with a sales area exceeding 2,000 m². If a tenant's operations are prohibited or restricted by law during the state of epidemic threat or epidemic, and the tenant does not conduct such operations, the rent for that period is reduced by 90% compared to the rent due to the landlord under the agreement, unless the agreement provides for a rent reduction that is more favorable to the tenant. This solution will be particularly available to businesses that lease premises in shopping malls and, due to prohibitions or restrictions, are unable to operate there due to the epidemic.

The legislature also provides additional protection for tenants, meaning that during a state of epidemic threat or epidemic, they will not be liable for non-performance or improper performance of the agreement. In particular, they will not be obligated to compensate for damages through the payment of a contractual penalty or compensation if the non-performance or improper performance of the agreement resulted from a ban or restriction on the tenant's activities. However, if equity requires it, the court may, after considering the interests of the parties and in accordance with the principles of social coexistence, determine the rent differently.

A solution for employers

Possibility of introducing changes to working time standards and concluding an agreement on changing employment conditions

An employer who has experienced a decline in economic turnover as a result of COVID-19 and who is not in arrears with tax liabilities, social security contributions, health insurance, Guaranteed Employee Benefits Fund, Labor Fund or Solidarity Fund by the end of the third quarter of 2019 will have the right to:

1. introducing restrictions on uninterrupted daily and weekly rest periods,
2. to conclude an agreement on the introduction of a system of equivalent working time, in which it is permissible to extend the daily working time, but not more than to 12 hours, in a settlement period not exceeding 12 months,
3. to conclude an agreement on the application of less favourable terms and conditions of employment of employees than those resulting from the employment contracts concluded with these employees, to the extent and for the period specified in the agreement.

A solution for people who have used certain services

The right to apply for a refund of funds paid

This solution will be available to both individuals and legal entities who have entered into a contract with a business operating in the field of exhibitions and congresses, cultural, entertainment, recreational, and sports activities, or organizing thematic exhibitions or outdoor events. If the termination of the contract is directly related to the outbreak of the SARS-CoV-2 virus, such a business is obligated to return the funds paid by the customer within 180 days of the effective date of the contract termination.

It should be noted that termination of the contract will not be effective if the customer agrees to receive a voucher from the entrepreneur to be used for future events within the entrepreneur's business within one year of the date on which the event for which the customer paid was to take place. Furthermore, the value of the voucher cannot be less than the amount paid by the customer towards the performance of the existing contract.

This solution will apply accordingly to an entrepreneur or farmer providing hotel services within the meaning of the Act of 29 August 1997 on hotel services and the services of tour guides and tourist guides.

A solution for the self-employed, contractors, agents and other service providers

The right to a demurrage benefit

The draft law provides for the right to a standstill benefit for persons conducting non-agricultural business activity, performing an agency contract, a contract of mandate, another contract for the provision of services to which the provisions of the Civil Code regarding a contract of mandate apply, or a contract for specific work.

A downtime benefit is payable if, as a result of COVID-19, there has been a business interruption, either by a person conducting non-agricultural business activity or by a principal or contracting party with whom a civil law contract has been concluded, lasting continuously for at least 30 calendar days before the month in which the application for the downtime benefit was submitted. Furthermore, a person performing a civil law contract is entitled to the downtime benefit if:

1. the civil law contract was concluded no later than 1 February 2020;
2. remuneration for the performance of a civil law contract is not less than 50% of the minimum wage applicable in 2020.

The contractor is not entitled to the standby benefit if the client has received aid for the payment of wages as part of solutions related to counteracting the economic effects of COVID-19.

The downtime benefit is payable as a one-time payment, equal to 80% of the minimum wage in effect in 2020. The Social Insurance Institution (ZUS) will pay the benefit. Payment will be made no later than 30 days after the last circumstance necessary to grant the benefit is clarified.

A solution for entrepreneurs

Possibility to apply to the Staroste for funding to cover part of the employee remuneration costs

In accordance with the assumptions of the draft anti-crisis shield, the Staroste may grant an entrepreneur co-financing of part of the costs of employee remuneration and social security contributions due on these remuneration if the entrepreneur has experienced a decline in economic turnover as a result of the occurrence of COVID-19.

Funding may be available in the event of a decrease in turnover by:

1. at least 30% – in an amount not exceeding the amount determined as the product of the number of employees covered by the application for co-financing and 50% of the minimum wage as defined in separate provisions,
2. at least 50% – may be granted in an amount not exceeding the amount determined as the product of the number of employees covered by the application for funding and 70% of the minimum wage;
3. at least 80% – may be granted in an amount not exceeding the amount determined as the product of the number of employees covered by the application for funding and 90% of the minimum wage.

Funding may be granted for a period not longer than:

• 6 months – in the case of micro-entrepreneurs and small entrepreneurs within the meaning of Article 7 paragraph 1 points 1 and 2 of the Act of 6 March 2018 – Entrepreneurs’ Law;
• 3 months – in the case of medium-sized enterprises within the meaning of Article 7 paragraph 1 point 3 of the Act of 6 March 2018 – Entrepreneurs’ Law.

It should be noted that the entrepreneur will not be able to receive funding in the part in which the same costs have been or will be financed from other public funds.

A solution for micro-entrepreneurs

Loan up to PLN 5,000 with the possibility of forgiveness

Micro-entrepreneurs will have the right to apply to the District Head for a loan from the Labor Fund to cover the current costs of running a business. This option will be available to micro-entrepreneurs referred to in Article 7, Section 1, Item 1 of the Act of 6–51 March 2018 – Entrepreneurs' Law, who conducted business activity before 1 March 2020.

The loan will be available for up to PLN 5,000 at a fixed interest rate of 0.05 of the National Bank of Poland's rediscount rate per annum. Importantly, the loan, along with interest, will be forgivable provided that the micro-entrepreneur does not reduce full-time employment compared to February 29, 2020, for a period of six months from the date of its granting.

A solution for entrepreneurs

Extension of validity of qualification certificates

The validity period of qualification certificates referred to in Article 54 paragraph 1 of the Act of 10 April 1997 - Energy Law, which expire between 1 March 2020 and 30 June 2020, will be extended until 31 December 2020. Qualification certificates issued during this period and earlier remain valid in accordance with the existing regulations.

A solution for entrepreneurs

Possibility of reducing the income obtained in 2019 by the amount of the loss

The legislator provides for a solution under which taxpayers who, due to COVID-19:

1. suffered a loss from non-agricultural business activities in 2020 and
2. in 2020, the total revenues obtained from non-agricultural business activities, which are taken into account when calculating the tax pursuant to Article 27 paragraph 1 and Article 30c and the lump sum tax on recorded revenues, are lower by at least 50% than the total revenues obtained from these activities in 2019,

they will be able to reduce the income obtained in 2019 from non-agricultural business activities in a one-off manner by the amount of this loss, but not more than PLN 5,000,000, by submitting a correction of the tax return for that year.

In turn, the loss not deducted on the basis of the above solution may be deductible under Article 9, Section 3 or Article 11 of the Lump-Sum Income Tax Act.

A solution for entrepreneurs

Extension of the deadline for submitting an application to the Central Register of Beneficial Owners

According to the draft bill, July 1, 2020, is the new deadline for fulfilling the obligation to report Beneficial Owners to the Central Register of Beneficial Owners. The original deadline was April 13, 2020. The Central Register of Beneficial Owners (CRBR) is a register that collects information on individuals exercising direct or indirect control over a company. The obligation to report to the CRBR applies to general partnerships, limited partnerships, limited joint-stock partnerships, limited liability companies, and joint-stock companies (excluding public companies).

A solution for entrepreneurs

Extension of deadlines for concluding agreements on the management and operation of PPK

We would like to remind you that entities employing at least 50 people (as of June 30, 2019) have been covered by the Employee Capital Plans Act since January 1, 2020. Therefore, in accordance with the statutory schedule, they should conclude PPK management agreements by April 24, 2020, and PPK management agreements by May 11, 2020. In the draft act, the legislator proposes to postpone the obligation to create Employee Capital Plans by six months, which means extending the deadlines for concluding a PPK management agreement to October 27, 2020, and for concluding a PPK management agreement to November 10, 2020.

Should you have any questions or concerns regarding the issues discussed above, our lawyers remain at your disposal. We encourage you to contact our dedicated lawyers.

This material was prepared on the basis of the draft act amending the act on special solutions related to the prevention, counteraction and combating of COVID-19, other infectious diseases and crisis situations caused by them, and certain other acts (draft version as of March 21, 2020)