Zagreb, 17 August 2009 – Croatian Employment Service (HZZ) has published instructions and forms for employers applying for reduced working week subsidy. All employers wishing to use subsidies for workers whose working week will be reduced, can as of today submit a request. The requests are submitted to local HZZ offices according to the headquarters of the employer or “organisational unit”.

Family farms, employers in difficulties and employers using employment subsidies are not entitled to reduced working week subsidy.

According to the Act on Subsidies for Maintaining Employment, which will be in force till the end of 2010, employers can, in agreement with trade unions, reduce the working week to 32 hours and obtain state subsidies in the amount of the difference of contributions. The state will compensate the difference of the reduced net wage in the amount of 10 percent, or 13 percent for workers with children. Workers receiving minimum wage will be compensated only up to 20 percent of the difference in contributions before and after the reduction of the working week.

HZZ has in its instructions calculated the approximate amount of state subsidies. So for example, for the gross wage of 3500 kuna before working time reduction the employer would receive the subsidy in the amount of 227,15 kuna – the difference of contributions before and after the reduction of the working week. At the same time, single workers would get subsidies in the amount of 40,10 kuna (10 percent of the difference of the net wage) or 61,39 kuna (13 percent) for workers with children. So the total subsidy for the gross wage of 3500 kuna would amount to 267,25 kuna, or 267,25 kuna for workers with children. For the minimum wage, which before working time reduction amounted to 2814 kuna, the state subsidy would amount to 209,92 kuna.  
In order to get  state subsidies for “Friday off”, companies must meet a number of requirements, one of them being the fact that in 2007 they did not operate at a loss. According to Government’s estimations, about 250000 workers could be entitled to state subsidies and about 200 million kuna is provided for them through cancellation of a part of measures for employment stimulation and reduction of unemployment benefits.

However, one question still remains - will anyone use state subsidies. A part of employers in production sector, especially exporters, have already reduced the working week without state subsidies. Legal subsidies, the aim of which is to prevent job losses for about 50000 industrial workers, will hardly meet their purpose. This is the argument of both trade unionists and employers which have for weeks been participating in negotiations on working week reduction.

The law does not protect workers with minimum wage

The Government has in the end passed the act without agreement with employers and trade unions, and at the same time introduced crisis tax because of which, according to employers, no worker will accept the further reduction of wages. Trade unions however said that the act, the aim of which was to prevent dismissals and which does not protect about 150000 workers with minimum wages, is pointless. Also, both employers and trade unionists believe that the act is passed too late.