ANNOUNCED AS TEMPORARYNo
On 24 August 2009 a regulation was signed by the Ministry of Law that enables the implementation of a law passed on 1 July 2009 that sought to mitigate the harm done by the economic downturn on firms and employees. The regulation states that companies in financial difficulties may receive support in the form of employee remuneration payments for the period of economic slowdown, but not exceeding 6 months. Payments may reach 100% of wage salaries. Additionally, in case of companies that lowered the number of working hours, decrease in remuneration can be compensated for a period not exceeding 6 months and to the amount of 70% of salaries.
This scheme reduces the incentive (in terms of lower costs) of firing staff. To the extent that wage costs influence the prices set by Polish firms then short term market outcomes may be affected too. Firms located outside Poland are not eligible for this payment and should they compete with Polish firms then the former are at a commercial disadvantage. Another form of discrimination may arise in discerning whether an applicant firm is "in financial distress".
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