The government and social partners have reached an agreement to extend the ERTE (Temporary Layoff) scheme until May 31, 2021. The terms of the agreement are similar to those currently in place, protecting both workers and businesses, maintaining the flexibility of the current ERTE model, and simplifying the application process. Job protection will be extended under the same terms as currently in effect. This agreement is pending formalization in the Royal Decree that will be published in the Official State Gazette (BOE).
We inform you that the Government has reached a new agreement with social partners to extend the ERTE from February 1st to May 31st, which will be reflected in the corresponding Royal Decree for publication in the BOE.
The terms of the agreement are similar to those currently in place, protecting workers and businesses, maintaining the flexibility of the current ERTE (Temporary Layoff) scheme, and simplifying the application process. Job protection is extended under the terms currently in effect.
Maintaining protection
The agreement includes the extension of all Temporary Employment Regulation Files (ERTEs) based on causes related to COVID-19.
Within these ERTEs, exemptions are again recognized for companies that are holders of them and belong to sectors with a high coverage rate for the file and a low rate of recovery of activity, although more generous objective criteria are used to determine these sectors, which leads to the incorporation of new CNAE, which implies that companies that employ almost 50,000 more workers are protected.
The ERTE schemes maintain flexibility in their application.
New ERTEs
It is expressly foreseen that those companies that are affected by restrictions that prevent or limit their activity may request a temporary layoff (ERTE) from the labor authority for limitations or impediments under the same terms of processing and requirements as those of the Third Social Agreement in Defense of Employment.
Temporary layoff schemes (ERTEs) based on Economic, Technical, Organizational and Production (ETOP) causes can continue to benefit from both the simplification of procedures provided for in Article 23 of Royal Decree-Law 8/2020 and the possibility, nonexistent in its ordinary regulation, of processing an extension by submitting to the labor authority an agreement in this sense with the unitary or union representation.
Simplification of procedures
Companies that hold a temporary layoff plan (ERTE) due to impediment or limitations, authorized before or during the validity of this regulation, will not have to request and process a new file before the labor authority to move from one to another to access the exemptions derived from a modulation of the health restrictions that make them place themselves in an impediment of activity from a limitation to this, or vice versa.
To access the benefits, they will simply need to send a notification to the labor authority that issued the resolution for the temporary layoff (ERTE) they hold, along with the workers' representatives. They will also not need to submit a new collective application for benefits to the SEPE (State Public Employment Service).
Accompanying measures
The commitment to maintain employment is maintained, under the terms set out in Royal Decree-Law 30/2020, which implies that companies, once the 6-month safeguard period derived from the regulations prior to said provision and the one that corresponds to the benefits referred to in said Royal Decree-Law (another 6-month period), commit, in return for the benefits for the exemptions regulated in the new regulation, to maintaining employment for another new period of 6 months.
Limits on dividend distribution and fiscal transparency, limits on overtime and outsourcing, the ban on dismissals and the interruption of temporary contracts are maintained.
Protection mechanisms
The exemption from the waiting period, the resetting of the counter to zero, the increase from 50% to 70% of the percentage used to calculate the regulatory base for those who have used 180 days of benefits, the benefits applicable to fixed-term intermittent workers (including the extraordinary benefit) and the improved protection of people affected by temporary layoffs with part-time contracts will continue to apply.
Applicable exemptions
The types of temporary layoff schemes (ERTEs) with exemptions until May 31st include:
- Highly protected sectors. These sectors, listed in the attached CNAE codes and their value chain, will have exemptions of 85% for companies with fewer than 50 employees and 75% for those with 50 or more. The exemptions will be the same for both suspended workers and those returning to their jobs. This list was expanded on December 22nd, adding new sectors (5530 - campsites and caravan parks, 7734 - rental of watercraft, 9604 - fitness maintenance activities), while removing three others (1393 - carpet manufacturing, 2431 - cold drawing, and 3220 - musical instrument manufacturing).
This list includes companies whose CNAE codes between the end of April and the end of December have not recovered activity by less than 70% and with a percentage of members covered by ERTE greater than 15%.
- Companies whose operations are hindered at any of their workplaces due to administrative restrictions implemented to combat the pandemic can apply for a "temporary layoff scheme (ERTE) due to impediment." These companies will receive an exemption from their Social Security contributions during the closure period and until May 31, 2021. This exemption will be 100% of the employer's contribution during the closure period and until May 31 if they have fewer than 50 employees, and 90% if they have 50 or more employees.
- Temporary Layoff Plan (ERTE) due to limitations. Companies or entities whose business operations are limited at some of their workplaces as a result of decisions or measures adopted by authorities may request a "Temporary Layoff Plan (ERTE) due to limitations" from the labor authority. In this case, the exemptions will decrease until May 31st, starting at 100% in February for companies with fewer than 50 employees and 90% for those with 50 or more employees.
Currently, 704,000 people are on furlough (ERTE), of whom 450,000 are under one of the schemes that include Social Security exemptions. Approximately 193,000 people were on furlough in sectors with the highest levels of protection, while another 49,800 in their supply chain were also protected by this mechanism.
Under the ERTE (Temporary Layoff Scheme) due to impediment, 32,000 people are protected, and another 175,000 were under the ERTE due to limitation as of January 18th. In these cases, there is a fluctuation in the number of protected individuals, which is logical, as they adapt to the administrative restrictions being approved. Outside of the modalities of Royal Decree 30/2020, without Social Security exemptions, another 254,000 people remain on the scheme. These modalities are in continuous decline.
Source: La Moncloa
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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