The Spanish Government extended the Temporary Employment Regulations ERTE, admitting the suspension of employment contracts, due to the Co-Vid Force Majeure, until June 30, 2020.

This extension is applicable to companies that cannot resume their activity.

Companies that can partially reinitiate their activity may incorporate the workers affected by ERTE, even adjusting / diminishing the employees’ working hours.

Companies must notify to the Labour Authorities the changes to the ERTE within a period of fifteen days.

WHICH COMPANIES CAN ASK FOR THIS EXTENSION?

Companies that have their fiscal domicile in tax havens will not be able to take advantage of the extension of the ERTE.

Companies that apply the extension of the ERTEs may not distribute dividends during the fiscal year when the ERTE has been applied.

EXEMPTION AND REDUCTION OF SOCIAL SECURITY CONTRIBUTIONS

Companies with a total suspension of activities

Companies with less than 50 employees are exempted from paying their Social Security quotas, if they are in an ERTE due to Force Majeure and have suspended all their activity.

If the companies have or more workers, the exemption is of 75% of the quota.

Companies with a partial suspension of activities

In cases of partial suspension of activity by application of an ERTE due to Force Majeure, the reduction in Social Security contributions will be:

Companies with less than 50 workers: 60%, in May, and 45 % in June

Companies with 50 or more workers: 45% in May and 30% in June

INCENTIVE TO REINCORPORATE WORKERS AND REDUCTION OF SOCIAL SECURITY FEES

Companies that apply ERTES due to Force Majeure and reinstate personnel will enjoy the following reductions in the Social Security contributions of reinstated workers:

Companies with less than 50 workers:

85% of quotas of workers who go back to work in May

70% of quotas of workers who go back to work in June

Companies with 50 or more workers

60% of the quotas in May

45% of the quotas in June.

POSSIBLE FUTURE EXTENSIONS 

The Government has included the possibility of future extensions, after June 30th 2020, if necessary for health reasons.

Andrea Accuosto