The Slovak parliament has introduced a law that would require employers to provide employees with a “recreational contribution” valued at up to EUR 275 that employees can use in participating hotels and similar venues.
The new law has been introduced via an amendment to the Act No. 91/2010 Coll. on Travel and Tourist Industry Promotion that indirectly amends several other acts, including the Slovak Labor Code. The amendment went into effect on January 1, 2019.
All employers that employ more than 49 employees are obliged to provide eligible employees with the contribution for recreation upon the employee’s request. Smaller employers may choose to provide the contribution voluntarily but are not required to.
Employees are eligible if they have been employed by the employer continuously for at least 24 months as of the commencement of the respective recreation. The employee is obligated to spend at least two nights in an accredited accommodation in order to qualify. The contribution may also cover other services that are specified in more detail in the Slovak Labor Code.
Upon the request of an employee, the employer is obligated to compensate 55 percent of total eligible costs of the employee and his or her family, up to EUR 275 per calendar year. The contribution is reduced proportionally for part-time employees. An employer may decide to compensate more than EUR 275 and use the Social Fund to cover the excess.
Employers may choose whether to provide the contribution in the form of a recreational voucher (an electronic voucher card) or alternatively reimburse the employee’s eligible costs upon proving the contribution entitlement and upon submission of relevant documents.
A recreational voucher is a new financial tool that stores ownership value electronically (via electronic card) that is issued by authorized entities. It works in a similar way to meal vouchers, where the employer has a special agreement with the respective provider. The employee may use the recreational voucher within a specific network of service providers (e.g., hotels) covered under the law. The recreational voucher may be issued only for natural persons, is non-transferable, and is valid until the end of the calendar year.
The vouchers are aimed at supporting domestic tourism as they can be used for recreation only within the Slovak Republic. The vouchers are exempt from income tax and are tax-deductible expenses for the employer.
Written by Katarína Bieliková and Ivana Hovancová of Wolf Theiss and Roger James of Ogletree Deakins
© 2019 Wolf Theiss and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.