New extension of ERTEs until September 30

The Council of Ministers has approved the Royal Decree-Law on the defense of employment, economic recovery, and the protection of self-employed workers. It extends until September 30 the set of benefits introduced in March 2020 to alleviate the situation of this group as a result of the COVID-19 pandemic and to support the conduct of their business activity.

The extraordinary employment protection measures relating to dismissals (employment safeguard) will also be extended, as will the suspension of the running of the term of temporary contracts placed under a temporary layoff scheme (ERTE) and the prohibition on overtime and outsourcing for ERTEs (on the terms of Royal Decree-Law 30/2020).

Specifically, the scheme of exemptions from social security contributions for the different types of ERTE is as follows:

Exemptions from social security contributions in Force Majeure ERTEs

Companies whose workforce (or part of it) is under a Force Majeure ERTE linked to the so-called ultra-protected sectors will benefit from the following exemptions from social security contributions:

– In companies with fewer than 50 employees, employees who leave the ERTE will qualify for 95% relief (bonificación), and in companies with more than 50 employees, employees who leave the ERTE will qualify for 85% relief.

– In companies with fewer than 50 employees, employees who remain in the ERTE will qualify for 85% relief in June, July, and August and 70% relief in September; in companies with more than 50 employees, the relief will be 75% in June, July, and August and 60% in September.

In addition, changes have been made to the list of ultra-protected sectors, which are those eligible for a Force Majeure ERTE. The following sectors are added to the list: manufacture of other wearing apparel and accessories; wholesale of coffee, tea, cocoa, and spices; and photographic activities. The following sectors are removed from the list: printing and related service activities; manufacture of optical instruments and photographic equipment; retail sale of computers, peripheral equipment, and software in specialized stores; space transport; and rental of water transport equipment.

Exemptions from social security contributions in ERTEs due to Impediment to activity

In the case of ERTEs due to Impediment to activity, the exemption scheme remains unchanged. The exemption scheme will therefore be as follows:

– 100% exemption from social security contributions in companies with fewer than 50 employees.

– 90% exemption from social security contributions in companies with more than 50 employees.

It should be recalled that ERTEs due to Impediment to activity are aimed at companies that are unable to carry on their activity as a result of new restrictions or measures adopted, by either Spanish or foreign authorities, on or after October 1, 2020.

Exemptions from social security contributions in ERTEs due to Limitations on activity

The scheme of exemptions from social security contributions in ERTEs due to Limitations on activity also includes some changes:

– Companies with fewer than 50 employees: 85% in June and July and 75% in August and September.

– Companies with more than 50 employees: 75% in June and July and 65% in August and September.

It should be recalled that this type of ERTE is aimed at companies and professionals whose activity is limited at some of their workplaces as a result of decisions or measures adopted by Spanish authorities.

Permanent seasonal workers (fijos discontinuos) will also be protected

The Government and the social partners have also taken into account the situation of permanent seasonal workers and have established rules for their protection. Thus, so that these workers are not penalized if the companies employing them do not call them back to their posts because the pace of the economic recovery prevents those companies from reopening, the social partners and the Government have agreed that companies must call these workers back to their jobs and, from that point onward, include them in an ERTE.

Will companies be required to maintain employment?

In addition to the extension of ERTEs, it appears that the employment maintenance obligation will be retained on the terms of Royal Decree-Law 30/2020.

This means that companies that take advantage of the new exemptions would be bound by a new six-month employment maintenance period, which would be added to the maintenance commitment previously undertaken. Likewise, the prohibition on overtime and on outsourcing activities will be retained.