Royal Decree-Law published extending COVID ERTEs and raising the minimum wage (SMI)

On Tuesday, the Council of Ministers approved a one-month extension, until March 31, of the pandemic-related temporary layoff schemes (ERTE)

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The extension will apply automatically, and this one-month period will allow companies to switch to the new models provided for in the labor reform, which has been in force since December 31.

In addition, an agreement has been reached to maintain, until June 2022, the social security contribution exemptions for self-employed workers who are receiving the cessation of activity benefit (cese de actividad), as well as the extraordinary benefit for the administrative closure of the business.

This week’s Council of Ministers also approved the increase in the national minimum wage (SMI) to €1,000.

The legislation does not provide for any formalities beyond the usual ones that must be completed with the State Public Employment Service (SEPE) and the General Treasury of Social Security (TGSS). In October of last year, additional formalities were required, and they were essential for the extension.

Extension of COVID ERTEs until March 31

Companies that have workers on an ERTE (temporary layoff scheme) for reasons arising from COVID will be able to keep them under this coverage throughout the month of March.

Accordingly, until April 1 the same conditions will be maintained for persons on a COVID-related ERTE, as will the extraordinary benefit for persons with permanent seasonal contracts (contratos fijos discontinuos).

Therefore, during March the contribution exemptions previously in force will continue to apply, with the following changes:

• 90% exemptions for ERTEs based on impediment.

• 60% exemptions for companies with COVID ERTEs that carry out training programs.

• 30% exemptions for companies with fewer than 10 workers with COVID ERTEs that carry out training programs.

• 20% exemptions for companies with more than 10 workers with COVID ERTEs that do not implement training plans.

Contribution exemptions until June

It should be recalled that three of the benefits currently in force for self-employed workers will end on February 28:

• The extraordinary benefit for low income.

• The cessation of activity benefit compatible with carrying on the activity.

• The benefit for seasonal self-employed workers.

However, a further agreement has been reached to maintain, until June 2022, the contribution exemptions for the 110,000 self-employed workers who are still receiving the cessation of activity benefit, as well as the extraordinary benefit for the administrative closure of the business.

Accordingly, the contribution exemptions for current recipients of cessation of activity benefits will be maintained until June 30.

As a result, self-employed workers receiving the cessation of activity benefit until February 28 will have:

• A 90% exemption in March.

• A 75% exemption in April.

• A 50% exemption in May.

• A 25% exemption in June.

And self-employed workers who are forced to close their business from March 1 onward as a result of restrictive measures adopted by the authorities in response to possible new outbreaks of the virus will continue to be entitled to an extraordinary financial benefit.

Therefore, if the requirements to obtain it are met, this benefit will remain at 70% of the minimum contribution base, in addition to entailing a 100% exemption from the payment of contributions.

Increase in the SMI to €1,000 approved

Royal Decree-Law 152/2022, setting the SMI, or national minimum wage, for 2022 at €1,000, has been published in the Official State Gazette (BOE).

Thus, the SMI reaches €1,000 gross per month, paid in fourteen installments, following the agreement reached with the trade unions.

This increase, which has effect from January 1, 2022, means that the minimum wage established for any type of activity is set at €33.33 per day as a general rule.

Following a Supreme Court judgment of January 26, 2022, the Court has endorsed companies’ ability to apply the SMI increase by absorbing seniority bonuses.

In this way, the worker’s salary would be supplemented to reach the 2022 SMI.