Royal Decree-Law 18/2021 includes the 6th Social Agreement in Defence of Employment, which formalises a new EXTENSION of the Temporary Redundancy Proceedings (ERTE), although with different nuances for the automatic extension (until 30 October 2021) or the extension that the new agreement foresees until 28 February 2022.
The new Royal Decree-Law transposes the 6th Social Agreement in Defence of Employment (ASDE) reached between the Government, the trade union organisations (CCOO and UGT) and the employers’ organisations (CEOE and CEPYME). On this occasion, the ERTE mechanism promotes training as a fundamental step to recapitalise workers and improve their employability. Companies with training actions will be able to access greater exemptions in Social Security contributions.
The new regulation, in force until 28 February 2022, establishes (i) on the one hand, the extension of ERTEs in their current modalities until 31 October 2021 (ii) and, on the other hand, the new ERTE modalities as from 1 November, for which it is compulsory to apply to the competent labour authority for their extension between 1 and 15 October.
Therefore, the new ERTEs will run from 1 November to 28 February 2022. The new model moves away from the old model based on the so-called sectoral ERTEs (relating to activities that had shown less recovery after the pandemic), in order to give greater protection to companies that promote the training of their employees.
It thus encourages the training of workers in the new ERTEs, subsidising the bulk of the cost of training on the one hand and, on the other, applying exemptions to companies that train their workers in ERTEs. Companies that train people affected by this type of ERTE will be entitled to an increase in the credit for financing training activities, depending on their size:
- 1 to 9 workers: 160 euros per person
- 10 to 49 employees: 240 euros per person
- From 50 or more persons: 320 euros per person
The benefits, in the form of exemption from Social Security contributions and with training aid, are greater depending on the size of the company and the training actions.
- The exemption scheme between November and February will distinguish between companies with fewer than 10 employees and those with a workforce of 10 or more. Thus, for the former, the exonerations in Social Security contributions will reach 80% if they carry out training actions and 50% for the rest; if the company has 10 or more workers, it will have an exoneration of 80% if it carries out training actions and 40% in the rest of the cases.
- The minimum number of hours of training for each person will be 30 for companies with 10 to 49 workers and 40 for those with 50 or more. And these activities must be carried out during the suspended working day.
- In addition, the ERTEs of impediment, linked to activity limitations, are maintained. Companies in this situation will be exempted from 100% of the company contribution accrued from November 2021, during the closure period and until 28 February.
In terms of worker protection, ERTE workers will continue to benefit from the exemption from the qualifying period for access to unemployment benefits. Also, the so-called “zero counter” will be extraordinarily extended until 1 January 2023.
The increase in the regulatory bases for calculating benefits (from 50% to 70%) is also maintained for beneficiaries who have used 180 days. Likewise, the benefits for people affected by ERTE with a part-time contract and the extraordinary benefit for discontinuous permanent workers continue to apply. In relation to the accompanying measures, the guarantees of previous agreements are also maintained, such asthe limits on the distribution of dividends and access to aid for companies domiciled in tax havens. Companies covered by these ERTEs will have to respect restrictions on access to overtime and outsourcing of activity.
The prohibition on dismissal is extended during the period of validity of the regulation and the maximum duration of temporary contracts for people under ERTEs is also interrupted. In the same vein, the commitment to maintain employment will have a new additional period of 6 months. The regulation also provides for the extension of the “MECUIDA” plan and the extraordinary benefit for arts professionals until 28 February 2022.
Specific ERTE for the Canary Islands
The Government has also approved the specific ERTEs for companies affected by the eruption of the Cumbre Vieja volcano on the island of La Palma and in the Canary Islands as a whole. Workers will be protected and companies will benefit from exemptions of up to 100% of social security contributions in the event that their activity is totally prevented and up to 90% in the case of limited activity.
Companies must apply to the labour authority to extend the benefits of the ERTE until 28 February 2022. To process this application , they must submit the list of hours or days of work suspended or reduced since July 2021. In the particular case of ERTE ETOP (economic, technical, organisational or production reasons), they must provide a report from the legal representatives of the workers. The simplification of procedures to move from an ERTE of impediment to one of limitation and vice versa is maintained. A communication to this effect to the labour authority and to the workers’ representatives will be sufficient.
Extension of aid to the self-employed
The Council of Ministers has also given the green light to the sixth aid scheme for the self-employed of this type, so that the extraordinary benefits in force to protect those who have a significant impact on their activity will be maintained until 28 February.
Firstly, the extraordinary benefit for suspension of activity continues , aimed at those self-employed workers with a temporary suspension of all their activity as a result of a decision by the competent administrative authorities to contain the COVID-19 pandemic.
The amount of the benefit is 70% of the minimum contribution base. In addition, the self-employed will be exempt from paying Social Security contributions, although this period will count as having paid contributions and, if applicable, will be compatible with income from paid employment up to 1.25 times the minimum wage.
Secondly, the benefit compatible with the activity is maintained for those workers who, while meeting the requirement for the ordinary activity cessation benefit, fulfil two additional requirements: one, that their turnover in the third and fourth quarters of 2021 falls by 50%, compared to the third and fourth quarters of 2019; and two, that they have not obtained taxable net income in the third and fourth quarters of 2021 of more than 8,070 euros (which is 1.2 times the minimum wage in two quarters).
Thirdly, those who do not meet the requirements for accessing this benefit or the ordinary termination of employment may apply for an extraordinary benefit. The amount of the benefit is 50% of the minimum contribution base and is also exempt from paying contributions and is counted as having paid contributions.
The requirements are to prove a 75% drop in income (income in the fourth quarter of 2021 must be less than in the fourth quarter of 2019) and not to have a net computable income between July and December 2021 of more than 75% of the minimum interprofessional wage. Fourthly, the benefit for seasonal self-employed workers is also maintained, which is 70% of the minimum base and requires income of no more than 6,725 euros in the third and fourth quarters of 2021.
Finally, a specific benefit has also been approved for the self-employed affected by the eruption of the Cumbre Vieja volcano on the island of La Palma.
Those self-employed workers who are forced to suspend or cease their activity as a direct consequence of this event will be able to receive the benefit for cessation of activity without the first five months of receipt being counted.
AddVANTE remains committed to informing you and to remain at your disposal for any queries regarding the new measures.