On January 11, 2023, Royal Decree-Law 1/2023, of January 10, on urgent measures regarding incentives for employment and improvement of social protection for artists, was published in the Official State Gazette (BOE). The new legislation aims to regulate incentives designed to promote employment, as well as other programs or measures to boost and maintain stable, quality employment financed through reductions in Social Security contributions and jointly collected levies, or implemented through other employment support instruments.

We inform you that on January 11, 2023, Royal Decree-Law 1/2023, of January 10, on urgent measures regarding incentives for employment contracts and improvement of social protection for artists, was published in the Official State Gazette (BOE).

The new regulation will come into force on September 1, 2023, with some exceptions included in its thirteenth final provision (such as the obligation to reimburse aid for relocation, the ex officio review in matters of classification acts for non-compliance with legal requirements or the benefit regime in the case of ERTE or RED Mechanism).

MAIN MEASURES REGARDING INCENTIVES FOR EMPLOYMENT HIRING

The new regulation aims to regulate incentives intended to promote employment, as well as other programs or measures to promote and maintain stable and quality employment financed through bonuses in Social Security contributions and by joint collection concepts, or developed through other instruments to support employment.

Below we summarize the main new features and points of interest.

Regarding the general conditions of the measures:

• The regulation governs the requirements to be a beneficiary, very briefly: not having been disqualified from obtaining public subsidies and aid or excluded from access to aid, subsidies, bonuses and benefits, being up to date with the fulfillment of their tax obligations, being up to date with the fulfillment of their social security payment obligations or having the corresponding equality plan, in the case of companies required to implement it (which will be understood to be fulfilled with the mandatory registration of the plan in the public registry).
• In the bonuses for indefinite employment contracts, including the transformation of contracts provided for in the regulation, and for the incorporation, on an indefinite basis, as working partners or workers in cooperatives and worker companies, the beneficiary must keep the recipient of the measure in a situation of registration, or assimilated to registration, with the obligation to contribute for at least three years from the date of the start of the subsidized contract, transformation or incorporation.
• The list of causes of termination is included in which, for the purposes of compliance with these obligations, the termination of contracts will not be taken into account, which include, among others, dismissals for objective or disciplinary reasons that have not been declared or recognized as unfair, collective dismissals that have not been declared unlawful, the expiration of the agreed time in the case of training or fixed-term contracts or the end of the call-up of employees with fixed-term intermittent contracts.
• Failure to comply with the obligations to maintain the registration will result in the loss of the right to the corresponding benefits with an obligation to reimburse under the terms provided for in the regulation.
• Regarding exclusions, hiring incentives will not apply in a number of cases, such as contracts made with employees who in the previous twelve months had provided services in the same company through an indefinite contract (or in the last six months through a fixed-term contract or a training contract) or workers who have left with an indefinite employment contract for another employer within a period of three months prior (except when the termination of the contract is due to dismissal recognized or declared unfair, or due to collective dismissal).

Furthermore, companies that have terminated or terminate incentivized contracts due to dismissals recognized or declared unfair, or due to collective dismissals, will be excluded from hiring incentives for a period of twelve months (starting from the date of recognition or declaration of unfairness, or the termination resulting from collective dismissal). This exclusion will affect a number of contracts equal to the number of terminations.

• Likewise, mechanisms are established for the control or verification of the objective requirements for access to and maintenance of the bonuses.

The regulation sets out the conditions, requirements, amounts, and periods for benefiting from the measures. The main measures are as follows:

• Bonuses for carrying out the alternating training, for the transformation into indefinite contracts of training and replacement contracts, for the indefinite hiring or incorporation as a partner in the cooperative or worker company of people who carry out practical training in companies, to alternating training, or for the hiring of research personnel under the modality of predoctoral contract.
• Bonuses for the replacement of unemployed workers in certain cases, for contributions of workers replaced during situations of birth and childcare, co-responsible exercise of the care of the breastfeeding child, risk during pregnancy and risk during breastfeeding, in cases of change of job due to risk during pregnancy or risk during breastfeeding and in cases of occupational disease or for the hiring of women victims of gender violence, sexual violence and trafficking in human beings and sexual or labor exploitation.
• Other scenarios covered by the regulation include bonuses for: the hiring of people with limited intellectual capacity, employees rehired after leaving the company due to permanent disability, the indefinite hiring of people in situations of social exclusion and long-term unemployed, or the transformation of temporary contracts in the agricultural sector into fixed-term intermittent contracts, among others.

The regulation also provides for other instruments to support employment, such as the possibility that collective bargaining may include commitments to maintain or increase employment, convert training or replacement contracts into permanent ones or improve permanent employment, or that the Government may establish measures to promote the voluntary implementation of equality plans.

Likewise, the additional provisions also include other bonus scenarios, such as, for example, for the permanent hiring of young people with low qualifications who are beneficiaries of the National Youth Guarantee System, for the hiring of people with disabilities, or in the employer's contribution to Social Security for research staff.

HIRING INCENTIVES

The hiring incentives focus on permanent contracts for priority individuals, as well as on converting certain temporary contracts into permanent ones. In summary, the following stand out:

• Reinstatement of employees in cases of permanent disability: Reinstatements are available for employees who have left the company due to total or absolute permanent disability, in order to improve the employability of this group. These incentives are limited to permanent contracts and cases where reinstatement is not based on an employee right, limitations not currently included in the regulations. Also new is the extension of these incentives to cases of employees over 55 years of age with permanent disability who are reinstated to their company in a different job category, as well as to employees over that age who regain their ability to work and are eligible for employment by another company.
• Hiring people at risk of social exclusion: The bonus currently provided for the permanent hiring of people at risk of social exclusion (€55/month) is increased to €128/month, thus matching the one established for the permanent hiring of other vulnerable groups.
• Hiring long-term unemployed individuals: Permanent contracts for long-term unemployed individuals qualify for a higher subsidy when the person hired is a woman (€128/month, instead of €110/month). This higher subsidy also applies to hiring individuals aged 45 or over.
• Work-study training contract. Regarding work-study training contracts, the law establishes fixed bonus amounts, rather than percentages, equivalent to those resulting from applying 75% to the single employer social security contributions stipulated for this contract and 100% depending on the company's size. The bonuses currently available for work-study training allow for the financing of both training costs and in-company mentoring costs, limiting the former to training activities linked to the aforementioned contract that take place in the workplace. However, the bonus for mentoring costs would be applicable to all companies.
• Conversion of training contracts to permanent contracts: The Social Security contribution benefits provided for converting training contracts to permanent contracts have also been updated due to the unification of their regulations. These benefits have been increased by 200% to match those provided for converting work-study contracts to permanent contracts. Furthermore, as with the bonus for converting replacement contracts, the current restriction limiting this bonus to companies with fewer than 50 employees has been removed.
• Permanent employment of people with borderline intellectual capacity: The permanent employment of people with borderline intellectual capacity will entitle the employer to a contribution bonus of 128 euros/month for four years.
• Hiring women victims of gender violence, sexual violence and human trafficking: The permanent hiring of women who have accredited the status of victims of gender violence, sexual violence or human trafficking, sexual exploitation or labor exploitation, and women in contexts of prostitution will entitle them to a contribution bonus of 128 euros/month for four years.
• Social economy and sectors: Bonuses are established for the incorporation of unemployed workers as working members or employees in cooperatives and worker-owned companies. Special attention is given to young people under 30 years of age, or people under 35 years of age with a recognized disability of 33 percent or more.
• Family reconciliation: (i) Fixed-term contracts entered into with unemployed young people to replace workers in certain cases; (ii) Bonuses in the contribution of replaced workers during situations of birth and care of the minor, joint responsibility in the care of the breastfeeding minor, risk during pregnancy and risk during breastfeeding; (iii) Cases of change of job due to risk during pregnancy or during breastfeeding, as well as cases of occupational disease.

Bonus for self-employed workers in Ceuta and Melilla

With effect from 1 January 2023, the new wording of article 36 of Law 20/2007, of 11 July, on the Statute of Self-Employed Workers (LETA) (final provisions 2. One and 13 b) RDL) will apply, under which workers included in the Special Regime of Self-Employed Workers (RETA) engaged in activities classified in the sectors of agriculture, fishing and aquaculture; industry, except energy and water; commerce; tourism; hospitality and other services, except fixed-wing air transport, building construction; Those engaged in financial and insurance activities, and real estate activities, who reside and carry out their activity in the Cities of Ceuta and Melilla, will be entitled to a 50% bonus on the contribution for common contingencies corresponding (and here is the novelty) to the provisional or definitive contribution base that results from the application in accordance with the provisions of article 308.1 of the General Social Security Law (LGSS) (previously, the minimum contribution base of section 1 of the general table of bases in accordance with the provisions of rule 1 of art. 308.1.a) LGSS, or, where appropriate, the contribution base applicable in accordance with rule 2 of the aforementioned article).

OTHER NEWS

Other relevant new features of the standard are the following:

• The powers of ex officio review by the Social Security Administration regarding classification decisions in cases of non-compliance with applicable legal requirements are incorporated. This new regulation prevents challenges to classification decisions from being transferred to the labor courts and keeps them within the jurisdiction competent to hear such matters, namely the administrative courts.
• The obligation to repay relocation aid is foreseen for companies that transfer their industrial, production, or business activity to territories that are not part of the European Union or the signatory states of the Agreement on the European Economic Area. In this case, all Social Security contributions received during the four years immediately preceding the relocation, as well as any subsidies received, must be repaid.
• It is determined which assumptions of application of benefits to the contribution for ERTE and RED Mechanism are linked to the performance of training actions.
• The regulation also introduces improvements in the social protection of artists .

You can contact this professional office for any questions or clarifications you may have.

Warm regards,

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MGI Àmbit

A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.

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