BICA proposes that our country introduce the German model for maintaining employment, basing its proposal on a German investor who details the German measure for 60% support.
The way it works in Germany
For a gross salary of € 2,000,per month the enterprise costs for the worker are € 2,473.70 (i.e., € 473.70 additional costs for the enterprise for insurance and other budgetary payments).
The net salary is EUR 1400 (with a number of conditionalities given the more complex tax system in Germany).
In an employment reduction (Kurzarbeit) mode, the accounts are as follows:
Net salary: 60% of normal net, ie 840 euros (= 60% x 1400). This is paid by the Employment Agency.
The enterprise costs: 80% of the social security contributions on the normal gross wage and the enterprise must also bear the share of the social security contributions, payable by the worker. The company normally owes € 397.50 to the 2000 gross wage and the employee € 402.50, i.e. the total insurance is 800 euros. Of these, the company pays 640 euros (= 80% x 800).
This is actually the cost of the employer for a whole month during which the employee does not go to work. The normal costs for this worker are 26% (= 640 / 2473.80).
It is important to note that as a further measure due to the coronavirus crisis, the company is currently being reimbursed the insurance payments, ie. during the crisis, its employee costs are 0% to the normal.
The state pays all the compensation, equal to 60% of the employee's net salary. That means the scheme is 60/0.
How does the scheme 60/40 work in Bulgaria
With a gross salary of 1000 BGN, the expenses of the enterprise are 1194.20 BGN.
Net salary: 775,98 BGN
In 60/40 scheme mode the accounts are as follows:
The net salary remains the same, i.e. BGN 775,98. (Compensation is 100%, which is not practised anywhere, it is unfair to the workers, it is impossible in a crisis, it would have a drastically smaller scope)
The company costs are 594,20 BGN (= 40% x 1000 + 194.20) for the whole month during which the employee does not go to work. The percentage of the normal costs for this worker is 50% (= 594.20 / 1194.20).
As a percentage of the employee's net salary, the company pays 77% (= 594.20 / 775.98).
I.e., compared to the German "60/0" the Bulgarian scheme turns out to be "23/77".
AICB offers the German model. Within the same earmarked resource of BGN 1 billion. The alternative for the worker is to be laid off and then, the scheme becomes "60/0" again. The state would have spent the same amount of money without maintaining employment.
