Information Note Update
COVID-19 – Extraordinary measures to support companies and maintain jobs
To prevent and contain the pandemic of COVID-19, the Portuguese government imposed a set of measures which determined, with a few exceptions, the compulsory shutdown of commercial establishments and retail stores, as well as the suspension of services and the preference towards teleworking, when the worker’s presence at his workplace is not deemed necessary.
Due to the strong impact of these measures on the economic life of companies, the Government has also enacted some measures of extraordinary, temporary, and transitory support, to mainatin jobs and mitigate situations of business crisis (simplified lay-off)
Which companies will have access to the simplified lay-off?
The simplified lay-off will be extended to support companies with a wider range of situations:
- All establishments and activities that have been forced to shut due to the measures adopted by the health authorities or due to the application of the state of emergency;
- Companies that may have been totally or partially paralyzed due to a loss of supplies and reserves, even if these have not yet been invoiced, namely companies that have a reduction of more than 40% in their production capacity due to the cancellation of supplies;
- Companies whose shutdown has not been decreed, and which do not yet have a 40% drop, if they have a drop in revenue compared to the average of the previous two months, or the same period last year.
- Companies that suffered an abrupt and sharp revenue drop of at least 40%, in the 30 days before the request directed to Social Security concerning the same period in the prior year; or for those who started the activity less than 12 months ago, to the average of that period.
General requirements to benefit from extraordinary support measures
In addition to being in a business crisis, the company must have its tax status regularized before Social Security and the Tax and Customs Authority.
What kind of support is available to these companies?
- Extraordinary support for maintaining existing jobs; or
- Extraordinary training plan;
- Extraordinary financial incentive to support the normalization of the company’s activity;
- Temporary exemption from the payment of Social Security contributions.
Note: These supports can be combined with others that the company already benefits from.
- Extraordinary support for maintaining existing jobs
Financial support equal to 2/3 of the employee’s gross salary, up to a maximum of 3 x RMMG (€ 1905.00), with a duration of 1 month, extendable monthly up to a maximum of 6 months, in exceptional situations. 70% will be covered by Social Security and 30% by the employer. The amount paid to the employee cannot be less than the RMMG.
It can also be combined with a training scholarship in the amount of 30% of the IAS, totaling € 131.64: half for the employee (€ 65.82) and half for the employer (€ 65.82).
To access this financial support, the employer has to inform, in writing, the employees covered by these aids, of the decision to apply to Social Security for extraordinary support for the maintenance of jobs. The employer also has to inform the expected period of interruption of the activity, after hearing the union delegates and commissions of workers, when they exist.
How to proceed?
- The employer must apply, in its model, to the Social Security Services
- The application must be submitted through the “Segurança Social Directa” (the Social Security digital platform) and the IBAN must be registered/amended there so that Social Security can pay the support to the employer, who will be responsible for paying the employee;
- The employer should list and identify the employees covered through their Social Security Identification Number (NISS).
2. Extraordinary training plan
Companies that have not resorted to extraordinary support for maintaining existing jobs can access extraordinary support for part-time training, which lasts for 1 month to implement the training plan.
This measure aims at maintaining jobs and reinforcing workers’ skills, to preemptively act against unemployment, supporting the training of non-employed workers in productive activities for considerable periods.
Each employee is to be given a certain amount of financial support based on the hours of training attended, and it cannot exceed 50% of the employee’s gross salary, with the maximum limit of RMMG (635 €).
To access this financial support, the employer must inform employees in writing of the decision to initiate a training plan as well as the expected duration of the said measure, immediately sending a notice to IEFP, IP, accompanied by a statement from the Administration and a certificate from the Certified Accountant.
Training Plan requirements:
- It must be implemented in articulation with the entity. The IEFP is responsible for its organization, with it being able to be executed at a distance when possible and the conditions allow it
- It must contribute to the improvement of workers’ professional skills, whenever possible increasing their level of qualification, and contributing to increasing the company’s competitiveness;
- It must correspond to the different types of professional qualification provided for under the National Qualifications System;
- Its duration must not exceed 50% of the normal working period during the period in which it takes place;
- The minimum number of trainees to be included in each training action is defined by an agreement between IEFP and the employer.
- Extraordinary financial incentive to support the normalization of the company’s activity
This financial support results in the payment of an amount corresponding to RMMG (635 €) per employee and shall be paid all at once.
To access this support, the employer must submit an application to the IEFP, I.P., accompanied by documents that attest to the situation of business crisis.
How to proceed?
The request for financial support is made by submitting an application and filling out a form available on the if online Portal, accompanied by the following documents:
- Accounting balance sheet referring to the month of support, as well as the corresponding same month or previous months, when applicable
- VAT declaration for the month of support, as well as for the two immediately preceding months, or the declaration for the last quarter of 2019 and the first quarter of 2020, according to the VAT regime in which the company is;
- Additional supporting elements, to be established by the member of the Government responsible for the area of Labor and Social Security
- Temporary exemption from the payment of Social Security taxes
Total exemption from the payment of Social Security taxes by the employer, the employees covered and members of the statutory bodies, during the term of the extraordinary measures. This means that employers submit autonomous salary declarations for the workers covered and pay the respective taxes, only in the part that concerns the worker – 11%.
To access this aid, the employer only has to make sure that the company is covered by one of the extraordinary measures mentioned above.
Note: Until April 30, the contributory debts contracted in March 2020 are not considered. The Decree-Law takes effect until June 30, and can be extended for another three months depending on the evolution of COVID-19 and its economic and social conequences.
How to proceed?
- The assignment is officiously done by Social Security services.
Inspection and non-compliance
The entities benefiting from the aforementioned aid can be inspected at any time by the competent public authorities.
Failure to comply with the aid obligations implies its immediate cessation and restitution.
Employers that do not before concerning observe the legal rules regarding the temporary reduction of the normal working period, as stipulated in the Labor Law, incur administrative offenses.
