Companies can suspend the employment contract of employees totally or partially (as in Portugal) “for reasons of force majeure”, as is the case of a pandemic, through a mechanism called ERTE (Expediente Temporal de Regulación de Empleo, which is what Spaniards call the lay-off). Companies that have been forced to close, who are unable to continue the work, for example, due to lack of raw materials or where there are cases of infection in the workplace, among others, can join. Workers, under this regime, are entitled to unemployment benefit (different from unemployment benefit), paid by the State, but which does not have a fixed amount.
In the case of suspension of the contract, it consists of paying 70% of the average salary for the previous 180 days (the company, if you wish, can pay more), with a maximum of 1,098.09 euros if you have no children, 1,254.96 euros if have a child and 1,411.83 euros if you have two or more children.
In situations of reduced working hours, the employee receives his salary depending on the hours he works and, in addition, he can claim unemployment benefit, up to 70% of the average salary. In some cases, employer’s social security contributions are suspended. The Spanish government has already guaranteed, however, that the requests for ERTE already submitted will be scrutinized by public authorities to prevent fraud and ensure that they are justified. If fraud is detected, entrepreneurs will have to repay all social contributions and unemployment benefits paid by the state to workers.
The Government approved a ban on dismissals in Spain due to the effects of the new coronavirus, whether for “reasons of force majeure”, economic or productive. The measure had been suggested by the main employers’ confederations in the country (here, CGTP has already requested the same) and it also applies to workers with fixed-term contracts – in these cases, the contracts will be renewed so that there are no dismissals.
The self-employed asked, but the Spanish government did not accept, the exemption from the payment of social security contributions during the month of March.
In case of infection with the new coronavirus, the worker receives what he would receive in a disease situation, except that the income is insured from the first day: 75% of the salary will be paid by Social Security and the remaining amount is supplemented according to what is stipulated in the employment contract.
Those who have mortgages to pay, but are in a “vulnerable situation”, in which the income may have been reduced due to Covid-19, will be entitled to a moratorium.
In cases where a contract has been signed between a public entity and a private company, but is not being fulfilled due to the effects of Covid-19, the public entity cannot terminate the contract, although it may be suspended or renegotiated.
The two-month period for requesting the opening of insolvency proceedings under the Spanish Insolvency Act is suspended.
A credit line was created for companies in the amount of 100 billion euros of guarantees guaranteed by the State, as well as a credit line for Tourism in the amount of 400 million euros (in the Portuguese case, sector lines were created in the amount of 3 billion euros, plus a 400 million line and a 60 million line for tourism).
To protect exports, an insurance coverage line was created for internationalization.
Companies with an annual turnover of less than six million euros will have a flexible payment of taxes for six months and a flexible payment of VAT, when it is less than 30 thousand euros.
The deadline for paying tax debts has been suspended until April 30.
Companies with less than 50 employees are exempt from paying Social Security contributions and the rest will have a 75% discount.
Enforcement procedures were suspended until April 30 (in Portugal, the same measure was taken but for a period of three months.
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