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Meet the Law | Resolution number 41/2020, of 6th of June 2020

By Resolution No. 41/2020, the Economic and Social Stabilisation Programme ("ESSP") was approved, which is based on four topics: a first topic dealing with social issues and support for people's income, especially those most affected by the economic consequences of the pandemic; a second topic related to maintaining employment and the gradual resumption of economic activity; a third topic focused on support for businesses; and, finally, an institutional matrix topic.

On employment matters, the changes in the simplified lay-off scheme and the creation of some measures to support employment are to be highlighted.

What are the measures that will replace the simplified lay-off scheme?

The simplified lay-off, in the scheme currently in force, is extended until the end of July of 2020.

Once the month of July is over, the companies which:

A.    Remain closed by determination of the Government will still be eligible for the simplified lay-off scheme;
B.    Register a drop in turnover equal or superior to 40% may benefit, between August and the end of 2020, from a progressive recovery support mechanism - which has as main assumptions: the progressive convergence of the employees’ salary to 100 %; the payment by the company of all hours worked; the progressive reduction of the exemption from social security contributions and the compensation for the loss of social security revenue by the State Budget:

C.    Have benefited from the simplified lay-off scheme may benefit from an extraordinary financial incentive for the normalisation of business activity, choosing one of two modalities: (i) 1 national minimum wage ("NMW") one-off per job that has been in lay-off under the simplified scheme or (ii) 2 NMW per employee paid in two or three parcels over 6 months.

In the 2 NMW per employee over 6 months modality, a reduction of 50% in Social Security contributions is foreseen for the first 3 months. On the other hand, if in the 3 months following the end of this support there is net job creation compared to the three months of the same period the company will be exempt from paying Social Security contributions for a period of two months in proportion to the gain of employment as long as it maintains this gain of employment for a period of six months.

What are the constraints associated with the support measure?

I.    Progressive recovery support mechanism: prohibition of collective dismissal, due to extinction of the job position and due to maladjustment during the implementation of the measure and in the following 60 days and prohibition of distribution of dividends during the implementation of the measure.
II.    Modality of 1 NMW one-off and 2 NMW over 6 months: prohibition of collective dismissal, due to job extinction and maladjustment, as well as the duty to maintain the employment level during the application of the support and within 60 days thereafter.

Does the Resolution foresees any support to the employees?

The Resolution also provides for the creation of a Stabilisation Supplement, with the objective of giving extraordinary support to employees with a basic remuneration of 1 NMW and inferior or equal to 2 NMW, who have had a reduction in income as a result of the pandemic, with the aim of mitigating the loss of family income.

It is a one-off measure, to be paid in July, in the amount of the loss of income of one lay-off month, in an amount that can vary between EUR 100 and EUR 351, to all employees with an income at February up to 2 NMW,who have recorded a loss in basic wage and who were in lay-off in one of the months between April and June.

What about self-employed employees? Will they also have access to any support?

Self-employed employees will be entitled to a support in the amount of 1 social support index (“IAS”) - EUR 438.81 - between July and December 2020.

These employees will be integrated in the social security system, with a 36-month bond to the public social protection regime.

This measure has as a requirement the attachment to the social protection system for 30 months, after the deadline forgranting the support - December 2020.

After the granting of the support, the contribution corresponding to the self-employed employee must be paid based on the amount of the support for 30 months.

During the period of concession, the self-employed employee contributes with 1/3 of the value of the contribution corresponding to the self-employed employee and the remaining is paid in the 12 months after the concession of the support.

Artists, authors, technicians and other arts professionals, who are not employees, will also be entitled to social support, which will be paid in July and September, in a total amount corresponding to the support available to independent employees, from which the amount of other social benefits they are receiving is deducted, as well as the remuneration obtained in the scope of their activities during the period of granting of the support.

This measure requires to have activity  opened in 2019 and  no debts to Social Security nor Tax Authority  (reported to February 2020) and also that the interest party does not benefit from other support, such as lay-off or culture support.

Is there any support foreseen for admissions under Teleworking regime?

Within the scope of the +CO3SO Employment Programme, a special hiring support system is created within the scope of the direct costs associated with the jobs created, namely the costs with salaries, increased by the respective contribution expenses borne by the employer, within a maximum period of 36 months, allowing coastal companies to receive an additional 0.5 IAS (Social Support Index), per job, for each month of support, regardless of the number of jobs created, whenever jobs are created in a territory of the Interior by teleworking regime.

What other employment measures have been created?

In addition to the approved measures in relation to the lay-off scheme, the PEES also provides for a Vocational Training Strengthening Plan, including diversified programmes for the training of young graduates, programmes for the development of distance learning and programmes for vocational retraining in higher education.

A Reinforced Programme of Employment Support was also approved, especially designed for new unemployed and young people, which includes measures such as Impulso PME jovem, +CO3SO Emprego, MAREESS, extraordinary support for the integration of disabled people and social hubs of employment.

Authors

Susana Afonso
Susana Afonso
Partner
Lisbon
Picture of Sofia Mateus
Sofia Mateus
Partner
Lisbon
Picture of Tiago Magalhaes
Tiago de Magalhães
Associate
Lisbon
Madalena Gonçalves da Silva
Trainee
Lisbon
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