15/01/2021
Today, Decree-Law no. 6-C/2021 was published in the Diário da República, introducing changes to the regime of Extraordinary Support for Progressive Resumption (“AERP”), the regime commonly known as “simplified layoff” and the regime of the “traditional layoff”, foreseen in the Labour Code.
In general terms, this legislation introduces the following changes:
- Extension of the regime provided for in Decree-Law No. 10-G/2020 from 26 March (simplified layoff) in situations where companies and establishments are subject to the duty to close facilities and establishments by legislative or administrative provisions from governmental sources in the context of the COVID-19 disease. In these cases, the payment of 100% of the salary up to three times the minimum monthly guaranteed salary (“RMMG” which is currently set at EUR 665.00) will now be ensured;
- Likewise, for workers covered by measures to reduce the normal working period (“NWP”) or to suspend their contract in a situation of business crisis (traditional layoff) which have been motivated by the COVID-19 pandemic and which have started after 1 January 2021, payment of 100% of their gross normal salary, up to a value equal to three times the RMMG, will now be ensured;
- Extension until the end of the first quarter of 2021 of the AERP and its extension to members of statutory bodies (“EOMs”) performing management functions in companies, with social security contributions and employees in charge. Furthermore, in this regime it is ensured 100% of the payment of the remuneration is up to triple of the RMMG, still maintaining the partial dispensation of contributions to Social Security, under the responsibility of the employer, but micro, small and medium enterprises (“SMEs”);
- Creation of simplified job maintenance support for micro-enterprises.
We have further developed these topics below:
- Simplified Layoff
With regard to this measure, the main change relates to the possibility of still keeping resources maintenance in cases where companies or establishments are subject to the obligation to close facilities and establishments by legislative or administrative determination from a government source in the context of the COVID-19 pandemic.
We recall that under the simplified layoff scheme, the employer may determine the reduction of the NHP or the suspension of employment contracts, with employees having the right to compensation.
With the amendment now introduced, the compensation is now calculated as follows:
_ The employee is entitled to receive a monthly minimum amount equal to 2/3 of his gross normal pay or the value of the RMMG corresponding to his normal working period (€ 665.00);
_ Employees are also entitled to receive compensation to the extent necessary to ensure, together with remuneration for work done within or outside the company, the amount of 2/3 of its gross normal remuneration (or the value of the RMMG if higher) up to a limit of three times the RMMG (€ 1995.00);
_ The compensation is paid in 30% by the employer and 70% by the Social Security;
_ Under the new rules, if the monthly amount to be received by the employee is lower than the employee’s gross normal remuneration, the amount of the compensation paid by Social Security is increased to the extent strictly necessary to ensure that remuneration, with the limit of three times the RMMG (€ 1995.00).
- Traditional Layoff
In the case of companies that begin traditional layoff processes after 1 January 2021, motivated by the COVID-19 disease pandemic, the employee will now be entitled to full payment of his gross normal salary up to the value of three times the RMMG (€ 1995.00), with the amount of compensation paid by Social Security being increased to the extent strictly necessary to ensure that amount.
We draw your attention to the information regarding the calculation of the wage and salary compensation referred to in point 1 above, given that the form of calculation is in all respects identical.
- AERP
The scheme will remain in force until 30 June 2021 with the following amendments:
- Situations of business crisis are now considered to be those where there is a fall in turnover of 25% or more in the full calendar month immediately preceding the calendar month to which the application for support relates compared to the same month in 2020 or 2019 or compared to the monthly average of the six months preceding that period. In the case of enterprises that have been in business for less than 24 months, the drop in turnover is measured against the average monthly turnover between the start of business and the penultimate complete month preceding the calendar month to which the application for support relates.;
- EOMs performing management functions, with declarations of remuneration, registration of social security contributions and employees in their charge also benefit from the AERP;
- Modification of the NHP reduction percentages as follows:
Revenue Breakdown | = > 25% | = > 40% | = > 60% | = > 75% | ||
Reduction of NFP | Until 33% | Until 40% | Until 60% | Up to 100% from January to April 2021 | ||
Up to 75% in May and June 2021 | ||||||
Salary / | Worked Hours | 100% | 100% | 100% | 100%** | |
Retributive Compensation* | Hours not worked | 4/5 of gross normal salary | 4/5 of gross normal salary | 4/5 of gross normal salary | 4/5 of gross normal salary | |
Social Security Support | 70% of the retributive compensation | 70% of the retributive compensation | 70% of the retributive compensation | 70% of the retributive compensation | 100% compensation if the NHP reduction is more than 60%. | |
TSU is to be borne by the company | Partial exemption of 50% on the value of the compensation for micro and SMEs. |
* If the total remuneration for hours worked together with the amount of the compensation results in a monthly amount lower than the employee’s gross normal remuneration, the amount of the compensation paid by Social Security is increased to the extent strictly necessary in order to ensure that remuneration, up to a maximum of three times the gross normal remuneration (€ 1995.00).
** In the case of companies with a loss of turnover of more than 75%, they are entitled to additional support amounting to 35% of the gross normal pay for hours worked owed to each worker with a reduction of the NHP. The value of this additional support added to the amount supported by Social Security in the retributive compensation (70%), may not exceed € 1995.00.
- Simplified support for the maintenance of jobs for micro-enterprises
Microenterprises (those employing less than 10 workers), which are in a business crisis and have received support under the simplified layoff or AERP schemes are entitled to financial support to maintain jobs, amounting to two RMMG (€ 1330.00) for each worker covered by that support, paid in a phased manner over 6 months.
The support is granted by the IEFP, I.P., upon application.
Employers who benefit from this support must fulfil a set of obligations that include:
_ Keep the tax and social security situation regularized with AT and Social Security;
_ Not to terminate, during the period of granting of support, and for the following 60 days, employment contracts by collective dismissal, dismissal for termination of employment and dismissal for maladjustment;
_ Maintain, for the duration of the support and for the following 60 days, the level of employment observed in the month of application.
Valadas Coriel e Associados’ team is at your entire disposal to analyse the concrete situation of your company and assess the most suitable support for the reality of your business.
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