COVID-19 | Decree 71-A/2020, setting the terms and conditions for the grant of support to employees and employers

Legal Alert no. 118 - Decree No 71-A/2020 of March 15th, laying down the terms and conditions for the grant of immediate support of an extraordinary, temporary and transitional nature, for employees and employers affected by the COVID-19 outbreak with a view to maintaining employment contracts in the company in a business crisis situation.

The measures taken by the Government were as follows:

a) Extraordinary support for the maintenance of employment contracts in a business crisis situation, with or without training;
b) Extraordinary training plan;
c) Extraordinary financial incentive to support the normalization of the business; and
d) Temporary exemption from payment of social security contributions, payable by the employer.

The present Decree also defines a business crisis situation, as:

a) The total shutdown of the business or establishment resulting from the interruption of global supply chains, suspension or cancellation of orders;
b) The sharp and abrupt drop of at least 40 % of billing, with reference to the same period of three months, or, for those who started the business less than 12 months, the average of that period.

The above circumstances shall be attested by (i) a statement from the employer and (ii) a document from the certified accounting officer of the Company.

The companies may be inspected at any time by the competent public authorities and must prove the facts on which the request is based and the renewal thereof by means of accounting documents.

Access Requirements

In order to access the measures published, the employer must have the tax and social security situation regularized before the Social Security and the Tax Authority.

Financial support

The aid takes the form of financial support, per employee, granted to the company and is intended exclusively for the payment of salaries.

The employer must notify the employees by written means of the decision to apply for the extraordinary aid to maintain the employment contracts, indicating the foreseeable duration and referring the respective request to the Social Security.

The remuneration – corresponding to the 2/3 of the employee’s wage - will be paid at 30 % of its amount by the employer and 70 % by the Social Security.

The aid may, exceptionally, be extended monthly, up to a maximum of 6 months, only when the company's employees have taken the maximum annual vacation limit and when the employer has adopted the working hour’s flexibility schemes provided by law.

Extraordinary training plan

The companies that have not require layoff scheme may have access to extraordinary aid for part-time professional training, through a training plan, with a view to maintaining their employment contracts and enhancing the skills of their employees.

The aid is for one month and is granted on the basis of the hours of training attended, up to a maximum of 50 % of gross remuneration, subject to the ceiling of 635,00 €.

Temporary exemption from payment of social security contributions

The employers who benefit from the measures provided for in the Decree are entitled to exemption from the payment of social security contributions payable by the employer regarding the employees covered and members of statutory bodies for the duration of the respective measure.

The exemption corresponds to the contributions concerning to remuneration for the months in which the company is the beneficiary of the measures.

The Decree entered into force on March 16th, 2020.

Did you find this useful?