Knowledge

Support for Employment (2021 Recovery Measures)

March 2021

EXTRAORDINARY SUPPORT FOR THE PROGRESSIVE RESUMPTION OF THE ACTIVITY

The extraordinary support for the gradual recovery, provided for in Decree-Law no. 46-A/2020, of 30 July, as amended, consists of financial support granted to the employer to support the maintenance of jobs in companies in a business crisis situation, with a temporary reduction in the normal working period.

This support was extended until September 30th 2021[1], and the payment of 100% of the remuneration of the workers covered is foreseen, up to the maximum limit of a normal gross remuneration corresponding to 3 times the minimum guaranteed monthly remuneration.

The range of beneficiaries has also been extended, and this program is now extended to cover members of statutory bodies that exercise management functions in companies, with Social Security contributions registered and with employees under their responsibility.

An employer that benefits from this support that is considered to be a micro, small or medium-sized company is entitled to 50% exemption from the payment of social security contributions under their responsibility for the workers covered.

SIMPLIFIED SUPPORT FOR MICRO ENTERPRISES

Decree-Law 46-A/2020 of 30 July, as amended, also provides for simplified support for microenterprises in business crisis in order to maintain jobs, consisting of 2 guaranteed minimum monthly salaries per worker covered, paid in a phased manner over 6 months.

With the changes introduced by Decree-Law 23-A/2021, of March 24, employers covered by support in the first half of 2021 who are still in a business crisis situation in June 2021 and who, in 2021, have not benefited from extraordinary support to maintain their work contract or extraordinary support for gradual recovery, are entitled to apply for additional support in the amount equivalent to a guaranteed minimum monthly wage between July and September 2021.

MAINTENANCE OF THE EMPLOYMENT CONTRACT IN A SITUATION OF BUSINESS CRISIS (SIMPLIFIED LAY-OFF)

Decree-Law 23-A/2021, of 24 March, now foresees the extension of this support:

  • To companies that are in total or partial stoppage of activity of more than 40 %, in the month prior to the application to be made in March and April 2021, resulting from the interruption of global supply chains, or the suspension or cancellation of orders, in situations where more than half of the turnover in the previous year was made in activities or sectors that are currently suspended or closed by legislative or administrative determination from a government source; and
  • To members of statutory bodies who exercise management functions, with remuneration statements and social security contribution records, and with employees under their charge.

NEW INCENTIVE TO THE NORMALIZATION OF BUSINESS ACTIVITY

Decree-Law 23-A/2021, of 24 March, created the new extraordinary incentive to the normalization of business activity for employers who, in the first quarter of 2021, have benefited from extraordinary support to maintain employment contracts[2] or extraordinary support to the progressive resumption of business activity.

The support is granted per worker and corresponds to:

  • 2 times the value of the minimum monthly wage guaranteed when applied for by May 31, 2021. The incentive payment is phased in over 6 months; in this situation there is also the right to a partial waiver of 50% of the payment of Social Security contributions to be borne by the employer, with reference to the workers covered, during the first 2 months of the incentive.
  • 1 time the value of the minimum monthly remuneration guaranteed when requested after May 31st, 2021 and until August 31st, 2021. The incentive is paid in a lump sum, corresponding to the 3-month period.

The employer that benefits from the incentive must (i) keep its tax and social security contributions up to date; (ii) not terminate, during the period the incentive is granted and for the following 90 days, employment contracts due to collective dismissal, dismissal due to the extinction of the job or dismissal due to unsuitability, as well as initiate the respective procedures; and (iii) maintain, during the period the incentive is granted and for the following 90 days, the employment level of the month prior to the month the application was submitted.



[1] Alteration introduced by Decree-Law no. 23-A/2021, of March 24.

[2] Provided for in Decree-Law 6-E/2021, of January 15, as amended.

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