Employment Incentive Measures

Yesterday entered into force the ministerial order no. 286-A/2013, 16th September (hereinafter the "Ministerial Order"), through which it was created an employment incentive ("Incentive") that consists in the attribution of a financial support to employers that celebrate employment contracts after 1st October, 2013.

This Ministerial Order is applicable to: 

• Employers that celebrate employment contracts under the Portuguese Labour Code, after 1st October 2013; 
• Temporary Employment Agencies, notwithstanding the duration of the contract entered into force with the temporary employee;

On the other hand, the Ministerial Order is not applicable to (Article 2 no.3 of the Ministerial Order): 

• Employers who conclude contracts of employment with very short duration; 
• Services of the Direct and Indirect Administration of the State, autonomous management bodies, services of regional and local administration, bodies and support services of the President of the Republic, Parliament, Courts and State Prosecutor Office, including the public institutes of special regime and the public authorities reclassified.

To obtain the above mentioned Incentive, the employer must fulfil the necessary conditions and requirements and submit the application upon the online formalization of the admission of the employee at the social security. The requirements to obtain the Incentive are cumulatively:

1. Tax and social security obligations regularized;
2. Situation regarding the refunds in connection with the financing of the European Social Fund regularized;
3. Situation regarding financial support granted by the Instituto do Emprego e Formação Profissional regularized;
4. No default situation regarding the contributions due to the labour compensation fund, the equivalent mechanism and the guarantee fund of compensation of employment;
5. Employer has an organized accounting in accordance to the provisions of the law, if applicable.

The Incentive corresponds to 1% of the monthly remuneration of the employee, being assumed by reference the amount paid by the employer to the employee and relevant for purposes of contributions to the social security. This Incentive may be combined with other employment benefits applicable to the same job position, whose assignment is, by nature, related to the conditions inherent to hired employees.

Lastly it must be highlighted that this measure has a transitory nature, referring to the period from the beginning of the execution of the employment contract -if celebrated since 1st October, 2013 - and 30th September 2015, or the date of termination of the contract, whichever occurs first.