Settlement of subsidies for employee salaries from the Anti-Crisis Shield.

The deadline is approaching for entrepreneurs who received subsidies to maintain jobs from the Guaranteed Employee Benefits Fund (FGŚP) to settle the funds received. However, the provisions of the Anti-Crisis Shield do not contain detailed regulations on how such settlement should be carried out. The lack of clear regulations and standardised practice in this area may mean that the settlement of funds will be even more demanding and pose more risks for entrepreneurs than obtaining them. None of the beneficiaries of FGŚP funds will be exempt from the obligation to settle the subsidy. According to statistics from provincial labour offices, job protection benefits have been granted to over 28,000 enterprises to date.

What should be kept in mind when settling the subsidy

First of all, the deadline specified in the regulations and the subsidy agreement must be met. It is not long. Beneficiaries have only 30 days from the date of the end of the subsidy period to document and settle the funds received. Some provincial labour offices initiate contact with entrepreneurs themselves when the settlement deadline is approaching. However, the lack of contact from the office should not lull entrepreneurs into a false sense of security. This is only a courtesy towards employers, not a legal requirement. It is the beneficiaries of the subsidies who are responsible for settling them, and it is they who are obliged to take action in this regard.

It is worth noting here that the deadline for fulfilling the above obligations varies depending on when the application for funding was submitted and the number of months covered by the application. Not all employers applied for the maximum three-month subsidy. The first (albeit relatively few) settled the subsidies received as early as May, if they applied for subsidies for only one month. However, the vast majority of employers still have this ahead of them. For most of them, the deadline for settling the funds received will start at the end of June at the earliest.

However, there are considerable practical doubts about the procedure to be followed when settling the funds, and above all, the documents to be submitted. According to the agreement on the payment of benefits for job protection from FGŚP funds, the beneficiary should submit to the employment office: (i) documents confirming the correct use of the funds received and (ii) documents confirming the employment of employees for the entire period of receiving the subsidy.

The settlement procedure and the list of specific source documents have not yet been standardised, and the approach of individual offices to this issue varies. This circumstance may be problematic for capital groups in which individual companies are based in different parts of Poland. The practice developed in one province may not necessarily apply in another, which is worth bearing in mind when compiling documents.

Some authorities have made available on their websites templates of documents to be used when settling subsidies. However, these forms are only of an auxiliary and ‘ad hoc’ nature. They are not official templates, but only documents developed by a given office. Therefore, there may also be discrepancies between regions. This may also generate additional administrative obligations for capital groups. It cannot be ruled out that if official guidelines and templates are published before the deadline for settling the subsidy, the documents currently available will simply become outdated.

What are the consequences of non-settlement or incorrect settlement of subsidies?

The real risk associated with non-settlement or incorrect settlement of funds received is the obligation to return them. As a rule, funds that have not been used or have been used contrary to their intended purpose are subject to return. The first category includes, for example, funds that have not been used due to events causing a lack of or reduction in an employee's remuneration. Examples include an employee remaining on unpaid leave or the payment of sick pay. An example of funds being used contrary to their intended purpose would be the allocation of a subsidy granted to a specific employee to another employee (e.g. in the event of termination of employment of the employee to whom the subsidy was granted while it was being received). The above cases are, of course, only examples. When determining the scope and amount of funds to be returned, it is necessary to conduct a thorough and comprehensive legal and factual analysis, taking into account all circumstances that occurred during the period of receiving the subsidy and may have an impact on the amount of employees' remuneration. Entrepreneurs should also take into account, among other things, issues such as: (i) combining forms of assistance from the anti-crisis shield, (ii) performing work during downtime, (iii) financing employee remuneration from other public funds, (iv) specific components of remuneration paid to employees during the period of receiving the subsidy, or (v) the exact periods for which the entrepreneur received the aid.

Unused funds should, in principle, be returned at their nominal value. However, if the funds have been used contrary to their intended purpose or the provisions of the agreement, they will be subject to full or partial repayment with interest at the rate specified for tax arrears.

It should also be noted that the settlement of funds is, in fact, the first stage of summarising the receipt of funding. The next stage is the control of how the funds are spent, which may be carried out within three years of the deadline for settling the funding. The authority may audit the entrepreneur for compliance with the provisions of the agreement or for proper documentation and use of the funds. Refusal to undergo an audit or the inability to actually carry it out may result in serious sanctions – entrepreneurs may even be required to repay the entire subsidy with interest at the rate specified for tax arrears.

That is why it is so important to properly document the manner and scope of spending funds from the Anti-Crisis Shield at this stage.