News

Discussion on best practices for employers of people with disabilities

AmCham CSR committee, in cooperation with HR and finance committees, Rytmus — Od klienta k občanovi, o.p.s. and MIDA Consulting, organized a panel discussion on available subsidies, tax deductions and other changes in 2015 with focused discussion among representatives of employers of people with disabilities. The seminar was held on January 13th at AmCham. Much discussion was held over the principals of support strategies for people with disabilities. The focus was on finding the right approach to helping disabled citizens and prevent their exclusion from society.

The issue of employing disabled citizens is not only a matter of societal responsibility. It is a concern important to HR and finance departments with the primary aim of profit, financial benefits and sustained business operation. All these fields pertain to the issue at hand. Let us recall some basic facts about the matter and give a summary of the fruitful discussion at the seminar.

Employing persons with disabilities does not represent a mere duty for enterprises to comply with legally. It encompasses an overall shift in enterpreneurial culture and in approaching disadvantaged people generally. The Czech labor law states that enterprises with more than 25 employees must employ persons with disability, at a minimum of 4% share out of all employees. More employers still are discovering the advantages of employing persons with disability in their firms. A discussion was led regarding the mandatory share of disabled persons, tax exemptions for such employers, enterpreneurial culture, and equal opportunities. 

The non-profit Rytmus — Od klienta k občanovi o.p.s. (Rhythm — Client to Citizen) assists employers in various fields. The greatest benefits of cooperation with a non-profit, as it pertains to assisted employment, include:

-        receiving a portfolio of potential viable candidates for job vacancies,

-        consulting of financial advantages of employing persons with disabilities,

-        assistance for new workers by a professional at the location of employment,

-        audit of job opportunities for persons with disabilities.

The employer gains certain advantages upon hiring persons with disabilities. These include:

-        more effective use of highly qualified employees if the enterpreneur chooses to delegate some routine operations (shredding papers, archiving, etc.) and this creates job opportunities for persons with disabilities,

-        strengthening social responsibility of companies, mainly in promoting good work experience,

-        elevating enterpreneurial culture. 

Subsidies for employers of persons with disability can be acquired from national and European funds. How are persons with disability seen in the Czech Republic and what is the view of the European Commission, as the main EU authority? 

Hana Soukupová of MIDA Consulting, a counselling company for subsidy applicants among firms, as they pertain to this or other issues, stated: "Subsidies for disabled workers, or disadvantaged persons, are seen as so-called soft projects. Support comes primarily from two sources: national and European funds. On state level, a person with a disability is one who must be granted protection on the jobs market (see the labor law). Tools of active politics of employment are used to achieve this protection. On the European level, these people are included in a broader group of the disadvantaged. The aim is then to work toward social inclusion of this group."

As we found during a lively discussion, many of us regard the separate approaches as partially conflicting with each other. Single steps taken within one of the approaches can thus result to be counterproductive in effect. 

Public support of employment has a horizontal character: this means that the state politics of employment transcends all fields. Its form is determined by the pertaining strategy for employment which is currently set for up to 2020, designed to correspond with the subsidizing period. The chief implementer and facilitator of financial support on a state level is the employment office. A different character of assessment and administration of projects on different levels has its positives (a lower administrative burden on the state level) and its negatives (emerging deficiencies in administration and the need to supply extra documentation because of differing methodologies). 

European and national subsidies are allocated by regions. The extent of support is then determined on the basis of a so-called regional map which states the maximum share of a subsidy on total project expenditures. Regions which suffer from a higher burden of a given sort — structural deficiency, higher unemployment, etc. — can be granted larger amount of support. In other regions the extent of support is set at 45 % for large enterprises, 35 % for medium-sized and 25 % for small enterprises. In the execution of some soft projects we often encounter de minimis aid — there the extent of subsidy may span up to 100 % of the project expenditures. The possibility of granting de minimis aid is determined by bids. These may allow for a maximum of 200,000 EUR allocated per supported project in aid. In contrast with the structurally deficient regions, Prague remains the least supported region. Although the capital received significant amount of aid, their share is in a minority, due to the high standards of living and GDP per capita that Prague shows in comparison with the EU’s average. 

Subsidy titles useful primarily in this field and planned for the programming period of 2014-2020 include these 3 most prominent subsidy programs:

1. The Operational Program Employment provides the most opportunities. The program consists of 4 priority axes. Of these, the first 2 axes are the most relevant for our aim — Supporting employment and adaptability of the workforce and Social integration and tackling poverty. These axes include support and extension of active politics of employment — the state support program. Activities such as educating, requalification and support for the creation of new jobs and filling current job vacancies by disadvantaged persons. Beneficiaries of the subsidy will be recruited extensively from state authorities, autonomous entities and government institutions, however due to supported activities we may conclude that private subjects will be secondary beneficiaries and municipalities or government institutions the facilitators. Private subjects will be able to apply directly in cases of some bids. The first bids in this program are to be expected by April this year.
2. Even though Prague suffers from insufficient subsidization, employment is one of the fields where financial subsidies can be received in Prague. The first bids in the Operational Program Prague — Growth Pole of the Czech Republic will be announced in Fall 2015 and will include support for such activities as setting up workshops which are an opportunity in employing those with disabilities. A great deal of attention is also paid to pre-school non-parental care and education in 2015. Bids for supporting employment should emerge in the upcoming years.
3. Micro-enterprises (of up to 10 employees) operating in a municipality of up to 2,000 inhabitants can be granted aid in the Rural Development Program. The Priority Axis 6 ‘Support for social inclusion, tackling poverty and helping economic growth in rural areas with aims in these fields’ bears great relevance. This axis aims to help develop small enterprises and create job opportunities for disadvantaged people.

In all these programs the subsidized expenditures are mostly salaries, rents of spaces, workplace equipment and supporting further education of employees.

Of course other subdsidy titles may be used in supporting disadvantaged people, even if the primary aim is not such and the programs belong rather to the category of general human resources support. These options include the Operational Program Enterpreneurship and Innovation for Competitiveness, the Operational Program Prague — Growth Pole of the Czech Republic or projects by the Fund for Further Education. Projects by the Fund were introduced at the seminar by the representative Mrs Sluková. She spoke mostly about the possibility of utilizing the programs Internships for the Young and Internships in Firms which provide the opportunity of support for finding interns in enterprises. Mrs Sluková also spoke of the Fund’s experiences with employing persons with disabilities. 

How do enterprises of more than employees adapt to the labor law, how do they comply with the duties imposed on them by the law, what should they pay attention to? The representative of Rytmus Jana Březinová focused on these topics.

From the view of state-level employment of persons with disabilities, it is possible for firms, apart from direct employment of disabled people, to use facultative compensation. This means the firm buy out goods or services from workers with disability, not employed by the firm, for a price set at 7 times the level of average wage in the 1^st to 3^rd quarters of the year when the duty emerged for the firm. Another way of adapting to the duty of employing persons with disabilities is to pay contribution to the state budget. This corresponds to a multiple of 2.5 times the average wage from the 1^st to the 3^rd quarter of the year when the obligation emerged, for not employing one person with disability. The three aforementioned methods may be combined. A model example is given in attachment 1. 

The issue of employing persons with disabilities touches on types of disability pensions. Due to frequent questions during the discussion, we wish to elaborate on this. From the point of view of the Czech legislature we recognize 3 degrees of disability pensions. The 1^st and 2^nd degrees denote that the beneficiary is a person with a medical disability. The 3^rd degree denotes that the beneficiary is a person with a severe medical disability. When complying to secure a required share of persons with disabilities among workers, beneficiaries of 1^st and 2^nd degree disability pensions are counted once. Beneficiaries of a 3^rd degree disability pension are counted three times. For instance, if a 3^rd degree disability pension beneficiary is employed with duty quantified in terms of time as 0.5, for the sake of this calculation the resulting quantification is 1.5.

When discussing financial relief for employers, we have to mention tax reliefs when employing persons with disability stemming from the law on income taxes No. 586/1992 Sb. (§35). The law allows for the reduction of tax in the relevant acounting period:

-          by 18,000 CZK per each employee with medical disability (excluding persons with severe disability — see below). This pertains to beneficiaries of 1^st and 2^nd degree disability pensions,

-          by 60,000 CZK per each employee with a severe medical disability (beneficiaries of a 3^rd degree disability pension).

When employing persons with disability, state funding may also be used. This pertains to the active politics of employment. These are contributions by the employment office for employing persons with disability and involving them in standard operations in the firm.

1. Contribution for creating a protected workplaces.
2. Contribution for purchasing equipment needed for the creation of a workplace suitable for a person with a disability. The condition is that the workplace is then occupied for a duration of 3 years. The maximum extent of aid is 8 times the average wage as accounted for in the first quarter of the preceeding year for 1^st and 2^nd degree disability pension beneficiaries and 12 times for 3^rd degree disability pension beneficiaries. (in the case of creating 10 or more such workplaces in the scope of one agreement, 10 times in the former and 14 times in the latter instance).
3. Contribution to partially finance the expenditures on sustaining viable conditions for the aforementioned type of workplace — potential beneficiaries may only apply after a minimum of 12 months elapsed from the day of employing a person with disability in this workplace, or from the day that workplace was established. Maximum contribution annually is 48,000 CZK.
4. Contribution to a socially beneficial workplace. Such contribution pertains to a person registered at the employment office (the contribution may be granted for a job applicant for whom no other form of employment is viable — especially those applicants to whom the employment office pays increased attention as specified in § 33 of the employment law). A contribution to a socially beneficial workplace, reserved by the employer for a particular job applicant, is granted via partially or fully covering the payed salary costs for the employed applicant, including social security and contribution to the state’s active politics of employment and health insurance which the employers has payed from the employee’s assessment basis.

A one-time contribution to an employer for establishing a socially beneficial job is designated for helping to equip the relevant workplace or purchasing tools required for the job (utensils, office supplies, furniture, PC and software, etc.).
This contribution pertains to new employees registered at the employment office (the contribution may be granted for a job applicant for whom no other form of employment is viable — especially those applicants to whom the employment office pays increased attention as specified in § 33 of the employment law). 

As of January 1^st 2015 the law on employment will be amended to bring about changes related to employing persons with disabilities. Below are some of the most important modifications to the law: 

1. The status of persons with a medical disadvantage is re-established. The law establishes a monthly 5,000 CZK contribution for employers who employ such people. Subsequently, after 12 months the employer may apply for a monthly 1,000 CZK contribution to overhead costs, where sole proprietors may apply for such contribution, but of 2,000 CZK monthly. Persons with a medical disadvantage are also counted in the calculation of share among workers as it pertains to complying with levels required by law. 

1. The possibility to employ persons with disabilities via an agency is re-estabilshed. The amendment enables employment agencies to employ persons with disabilities and facilitate their temporary engagements with the clients. Employment agencies, however, will not be able to count temporarily allocated employees when calculating shares among workers for the purposes of compliance with levels required by law. 

1. If a firm apllies for a contribution from the active politics of employment in 2015, it is no more obliged to provide evidence of zero indebtedness. This will be done by the employment office. Thereby the bureacratic burden of this process for the firms is decreased. 

1. In terms of facultative compensation, the bureacratic burden for firms will — unlike is the previous point — increase in 2015. The purchaser (employer with more than 25 employees who engages in facultative compensation) has the duty to provide reports on complying with the facultative compensation. These reports must be filed by February 15^th at the employment office and the information stated must be in accord with what the supplier evidences.

A lively discussion, commencing during the very introduction to the issue, shows that the topic is of great interest and arouses emotion. We are pleased to say this was evident at the seminar, as one of the aims of this project was to stir up critical thought on employing persons with disabilities and to make the participants assess the positions these persons can have in enterprises. All those who were present found practical experiences of involved parties, consulting firms and especially the employers very beneficial. If we were to point out a central message that emerged at the seminar, this would be it:

‘Do not be afraid of employing different people, be it people with a disability or medically disadvantaged people. Not only will you gain quality and loyal employees, you will also enrich your work team on a social and human level and grant your employees space for personal and professional growth in a new dimension. To dedicate enough time to these groups of employees can be strenuous and presents extra effort, but it is an enrichment.’