ABOLITION OF THE MANDATORY SOLIDARITY CONTRIBUTION AND ADOPTION OF THE ERA-1D AMENDMENT
Amendments to the Act Determining Intervention Measures for Flood and Landslide Recovery of August 2023
On 10 November 2023, the National Assembly of the Republic of Slovenia adopted an amendment to the Act Determining Intervention Measures for Flood and Landslide Recovery of August 2023. The amendment will enter into force the next day following its publication in the Official Gazette of the Republic of Slovenia.
Among the most significant solutions of the amendment, it is worth highlighting the abolition of the obligatory solidarity contribution. Instead, the government plans to temporarily increase the corporate tax rate by three percentage points for the next five years as one of the sources of funding for reconstruction.
The Solidarity Saturday remains voluntary and can still be implemented by companies in consultation with workers' representatives. Moreover, the amendment explicitly provides that no income tax or social security contributions are payable on the workers’ wages for work done on that specific day. The employer will also not have to report the income in the withholding tax return, but instead only in the return for the Reconstruction Fund. In addition, the employer's contribution for work performed on the Solidarity Saturday, which was previously set in the same amount as the employee's contribution, is abolished.
If the company has already implemented the Solidarity Saturday, the employee or the employer may request reimbursement of the contributions paid from the Financial Administration by 31 December 2023 at the latest.
Changes to the Employment Relationships Act
The National Assembly of the Republic of Slovenia adopted the Act Amending the Employment Relationships Act (hereinafter "ERA-1D") on 7 November 2023, which harmonizes Slovenian legislation with European legislation, specifically with Directive 2019/1152/EU of the European Parliament and the European Council of 20 June 2019 regarding transparent and predictable working conditions in the European Union as well as the Directive 2019/1158/EU of the European Parliament and the European Council of 20 June 2019 on work-life balance for parents and caregivers.
As previously reported in our Legal Alert, ERA-1D introduces changes in the area of part- time employment contracts to promote the reconciliation of work and family life, as well as the possibility of part-time work for employees who are victims of domestic violence. Additionally, ERA-1D introduces the changes to the provisions on amendment of the employment contract, a new regulation on written notice prior to employment contract termination due to misconduct, subsidiary liability in subcontracting, the right to disconnect, caregiver’s leave, special protection of victims of domestic violence, and higher compensation for agency employees on furlough. Additional novelties introduced by ERA-1D relate to the special protection against dismissal of employee representatives, the possibility of establishing a special fund for reimbursement of paid compensations, and the obligation of employers to provide employees with written information about their employment relationship.
ERA-1D was published in the Official Gazette of the Republic of Slovenia on 15 November 2023 and it enters into force the day after its publication, i.e. on 16 November 2023.
How can EY help?
The provisions adopted can have many new impacts on established work and business processes in your organization. At EY, we can assist in finding solutions, as well as preparing measures from both legal and tax perspective. If you require our advice, our team of legal and tax professionals is at your disposal.
