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Meet the Law | Government Order no 76-B/2020, of March 18, which amends Government Order no 71-A/2020, of March 15

Immediate extraordinary, temporary and transitory support for workers and employers affected by the outbreak of the Covid-19 virus, with a view to maintaining jobs and mitigating corporate crisis situations are foreseen.

Measures

Extraordinary support to maintain the employment contract in business crisis situations, with or without training;

Extraordinary training plan;

Extraordinary financial incentive to support the normalization of the company's activity;

Temporary exemption from the payment of social security contributions by the employer.

What situations are to be considered?

Business crisis situation:
a)    When there is the total breakdown of the company/undertaking’s activity, resulting from the interruption of the global supply chains or the suspension or the cancellation of orders; or
b)    When there is an abrupt and sharp drop in 40% of the company’s turnover, in the 60 days preceding the request to the social security with reference to the same period or, for those who started the activity less than 12 months ago, the average of that period.

Note: these are not cumulative.

Procedure

1.    The employer must hear the respective union representatives and works councils (as applicable);
2.    The employer must notify, in written form, the employees of its decision to proceed with this extraordinary support, with indication of the foreseeable duration.
3.    The decision must also and immediately be notified to the Social Security authorities along with the documentation that supports the company’s crisis and the list of concerned employees (containing the respective Social Security number).

Modalities

The employer may decide on
•    the suspension or
•    on the reduction of the employees’ normal working period, according to the regulations of the general lay off regime.

Financial compensation and benefits

The concerned employees are entitled to a financial compensation corresponding to a minimum of 2/3 of their gross monthly salary, with a minimum threshold of 1 national minimum wage (€635,00) and a maximum limit of 3 national minimum wages (€1905,00).
 
This compensation is co-financed by the Social Security, as follows:
•    30% of the gross amount paid by the employer;
•    70% of the gross amount paid by the Social Security.
 
Note: during the period on which this regime is in force, employers will be exempt from social security contributions regarding the concerned employees, as well as of the respective directors.

Duration1 month.
Renewal

Monthly renewable, up to a maximum of 6 months.

The employer is not anymore obliged (due to the new Government Order’s amendments) to guarantee that employees have taken the maximum annual holiday leave and that the employer has adopted the working time flexibility mechanisms provided for by law.

Other specificities

Employers who resort to this extraordinary support must have their tax and contributory status regularized.

Employers may be subject to an inspection, at any time, by the public competent authorities, in which case it will be necessary to evidence the facts on which the request and respective renewals were based (namely through a balance sheet, VAT declaration, and other relevant documentation).

Any false statements made by the company in this respect will determine the payment of the Social Security contributions regarding the applicable period, without prejudice to other penalties provided for by law.

Under penalty of having to return the financial compensations already paid or the contributions that were exempted in this regard, the employer:
•    Is forbidden to dismiss any employees, unless for cause;
•    Must comply in a timely manner with the Social Security payments of its employees;
•    Must comply with its legal, tax and contributory obligations;
•    May not distribute any profits while benefiting from this support;
•    May not default on the payment of any of its obligations, within the established deadlines;
•    Make false statements.

 

Authors

Portrait ofSusana Afonso
Susana Afonso
Partner
Lisbon
Portrait ofSofia Mateus
Sofia Mateus
Partner
Lisbon