Simplified Lay-Off Process
- Simplified ‘lay-off’ procedure providing a financial support towards the maintenance of employment contracts, with or without training, in case of temporary reduction of the normal working period or suspension of the employment contract, ensuring social security 70% of the employees remuneration;
- This measure is applied to companies with verification of i) 40% drop in the period of thirty days prior to the request from the competent social security services, with reference to the monthly average of the two months prior to that period, or compared to the same period in the previous year, or even for those who started the activity less 12 months, the average of that period; ii) cessation of the activity resulting from interruption of global supply chains, the suspension or cancellation of orders or to companies or establishments whose total or partial closure has been enacted by decision of the political or health authorities;
- Companies in this situation may benefit from an additional temporary exemption from the social security contribution payments and an extraordinary financial incentive to support the normalization of the company’s activity, granted by IEFP, IP, corresponding to the value of RMMG (635 €) per worker;
- Possibility of accumulate the support measure with IEFP vocational training, on which a grant of EUR 131.64 will be paid, half of which is allocated to the employee and the other half to the employer;
- During the period of reduction or suspension, as well as within 60 days of its application, the employer cannot terminate employment contracts by means of collective dismissal or extinction of job post;
- To access these measures, companies shall have their tax and contributory situation regularized. For this purpose, until April 30, 2020, debts incurred in March 2020 won’t be considered;
- Possibility for lay off employees to engage in paid activity provided that in the areas of food production, social support, health, logistics and distribution;
In the context of extraordinary support for the maintenance of employment contracts, the calculation of retributive compensation considers the remuneration benefits normally declared for social security and usually received by the employee, relating to basic remuneration, monthly premiums and regular monthly allowances;
The inclusion of new employees during the period of extraordinary support for the maintenance of employment contracts, which are in addition to those identified in the initial application, is made through the delivery of a new attached file;
- Payments of uncertain or variable nature, as commissions are not considered in the calculation of the illiquid monthly remuneration in the simplified lay-off scheme;
- Suspension of labour accident insurance in the event of suspension of the employment contract under the simplified lay-off scheme. In the event of a reduction in the normal working periods, the obligation to insurance is maintained;
- Companies with establishments whose activities have been subject to the lifting of closure restrictions after the end of the state of emergency or of restrictions imposed by legislative or administrative determination continue, from that moment onwards, to be able to access the simplified lay off mechanism, provided that they resume the activity within eight days;
- The extraordinary financial incentive to support the normalisation of the company’s activity is regulated by an ordinance of the member of the Government responsible for the area of work, namely as regards the procedures, conditions and terms of access;
- For the purposes of non-compliance and restitution of the extraordinary support for the maintenance of an employment contract in a company in a situation of corporate crisis, paragraph e) of no. 1 of article 303 of the Labour Code is not applicable in the part concerning contract renewals;
- Applications submitted upon declaration by the employer together with a certificate from the certified accountant, in which the starting date of the extraordinary support measure for the maintenance of employment contract in a situation of business crisis is subsequent to March 16, 2020, are accepted.
Measures to protect employees and job positions
A) Support for dependents
- Justified absences to employees and self-employed workers, without any except regarding retribution, motivated by undeterable assistance to children or other dependents under the age of 12, or, regardless of age, with disabilities or chronic illness, resulting from suspension of presential classes and non-school activities in school. The employee is entitled to receive exceptional monthly or proportional support corresponding to two thirds of his basic remuneration, paid in equal parts by the employer and social security. To this end, it will be considered the basic remuneration declared in March 2020 for February 2020 or, in the absence of basic remuneration declared in that month, the amount of the minimum monthly remuneration guaranteed. In situations where the employee has more than one employer, the ceiling is applied to the total basic remuneration paid by the various employers, with the support payable distributed proportionally, depending on the value of the basic remuneration declared by each employer;
- Justified absences for family assistance, when there is a need to assist the spouse or person who lives in registered partnership or common economy with the employee, relative or similar in the straight upward line that is in charge of the employee and who frequent social facilities whose activity is suspended by an health authority;
- Justified absences motivated by the provision of assistance or transportation, within the scope of the COVID-19 disease pandemic, by volunteer firefighters with an employment contract with a private or social sector employer, evidently called by the respective fire department;
Justified absences do not result in the loss of any rights, except with regard to remuneration;
- Exceptional financial support for employees who have to stay at home with their children up to 12 years of age in the amount of 66% of the basic remuneration. From April, this support is equivalent to 100% of the basic remuneration of the employees who have to accompany their sick or in prophylactic isolation children;
- Exceptional financial support for self-employed workers who have to stay at home with their children up to 12 years old, amounting to 1/3 of the average remuneration;
- Self-employed workers obliged to pay for at least 3 consecutive months for at least 12 months, who are unable to continue their activity, are entitled to an exceptional monthly or proportional support;
- The value of the support corresponds to one third of the mensual contributory incidence base for the first quarter of 2020. The support has a minimum limit of 1 Indexing social support (IAS) and maximum of 2 1/2 IAS, and may not, in any case, exceed the amount of remuneration recorded as a basis of contributory incidence;
Entities benefiting from the support shall, for the purpose of proving the facts on which the application is based and its extensions, preserve the relevant information over a three-year period;
During the period of granting the support, there is no compensation with previous debts of the holders of the support or their employer;
Entitlement to child and grandchild care allowances in the event of prophylactic isolation without a guarantee period;
- Increase in the daily amount of child support allowance for employees performing public functions as part of the convergent social protection scheme;
- The daily amount of child care allowance is now equal to 100% of the reference remuneration.
B) Professional Training
- Creation of an extraordinary vocational training support, in the amount of 50% of the employee’s salary up to the National Minimum Wage, plus the cost of training, for the situations of employees not employed in productive activities for considerable periods;
- Guarantee of social protection for trainees and trainers during training activities, as well as for beneficiaries engaged in active employment policies who are unable to attend training activities;
- The presential training activities developed or promoted by the Institute for Employment and Vocational Training, I. P., through the direct management vocational training centres, participated management vocational training centres or by training entities may be resumed as from 18 May 2020, in a gradual manner and with the necessary adaptations, provided that compliance with the guidelines of the Directorate General of Health is ensured, namely in terms of hygiene and physical distance. Without prejudice to the provisions, the entities therein provided shall give priority to the development of the formative activity at a distance and to projects of articulation between this activity and face-to-face formative activity, whenever the conditions allow it.
C) Measures to support employees in case of sickness
- Payment of 100% of the reference remuneration to employees and self-employed workers in the general social security system in prophylactic isolation for 14 days, motivated by situations of serious risk to public health determined by the health authorities;
- Entitlement to sickness benefit without a waiting period.
- Payment of one third of the remuneration;
- Declaration of working hours and normally declared remuneration for the employee, irrespective of the partial suspension of his actual payment;
- Payment of the corresponding contributions.
In case of domestic servisse employees, the declaration of each employer attesting the non-provision of and the non-payment of the entire remuneration shall be preserved for three years.
- Financial support to employees who are exclusively covered by self employed the scheme and who are not pensioners, subject to compliance with the obligation to contribute at least 3 months in a row or six months interpolated for at least 12 months:
- In a proven situation of total stopping of the activity performed or other activity of the same sector as a result of due to covid-19 pandemic; Or
- By a declaration together with na accounting certificate attesting that it is in a situation of abrupt drop of at least 40 % of income in the period of thirty days preceding the application with the competent social security services, with reference to the monthly average of the two months preceding that period, or compared to the same period of the previous year or , also for those who started the activity less than 12 months ago, at the average of this period.
- In order to attest the situation of income breakage, the concerned employees must submit a commitment of honour declaration or, in case of self employed workers in the organized account scheme a certificate from the accountant;
- The support is one month, extendable, up to the limit of six months and is paid from the month following the submission of the application;
- As long as the payment of the extraordinary support is maintained, the self-employed, when subject to this obligation, shall maintain the obligation of the quarterly declaration;
- The amount of financial support is multiplied by its respective drop, expressed in percentage terms;
- For the calculation of support, the remuneration considered corresponds to:
a) For self-employed workers, the average contributory impact base for the months in which there has been a record of remuneration in the period of 12 months immediately preceding the date of application submission;
b) For managing partners, the basic remuneration declared in March 2020 for the month of February 2020 or, in the absence of basic remuneration declared in that month, the value of the indexing of social support.
- The drop shall be declared and subject to further verification by social security services within one year counted from the support, on the basis of the information requested to the Tax Authority, giving rise to an eventual refund of the amounts wrongly received;
- The support provided is granted, with the necessary adaptations, to the managers of private limited companies and members of statutory bodies of foundations, associations or cooperatives with functions equivalent to those, which are exclusively covered by the general social security system in that capacity and carry out that activity in a single entity that in the previous year had invoiced less than (euro) 80,000;
- When the communication of the elements of the invoices through the E Invoice does not reflect the totality of the practiced operations subject to VAT, even if exempt, related to the transmission of goods and services, referring to the period in analysis, the measurement of the limits foreseen therein is made by declaration, with reference to the turnover, with the respective certification by a certified accountant, and subject to subsequent verification by the social security, within one year from the attribution of the support, based on information requested to the Tax and Customs Authority, giving rise to the eventual restitution of the unduly received amounts;
- The support provided shall have as its minimum limit a value corresponding to 50 % of the IAS value and may be extended on the basis of any of the conditions laid down;
- The support granted is conditional on the activity being continued within eight days if it has been suspended or terminated;
- The self-employed workers covered by the above-mentioned financial support measures are entitled to deferment of the payment of contributions due in the months in which the extraordinary financial support is being paid.
Extraordinary measure to encourage professional activity
- The self-employed worker is entitled to a one-month financial support, extendable monthly up to a maximum of three months, based on the average of the invoices reported for tax purposes between March 1, 2019 and February 29, 2020, with a maximum limit of half of the value of the IAS and a minimum corresponding to the lowest base value of the minimum contribution;
- The application for granting the support determines, from the month following the cessation of the support, the effects of the placement in the scheme for self-employed workers or the cessation of the exemption;
- The value of the average invoice that determines the calculation of the support is transmitted by the Tax and Customs Authority to Social Security;
- Attribution of the support is subject to the effects of the classification in the social security regime of the independent workers and implies the maintenance of the exercise of activity for a minimum period of 24 months after the cessation of the payment of the benefit;
- The support is due from the date of application and is granted for a maximum period of two months;
- The amount of the benefit to be granted is half the amount of the IAS;
- The amount of the benefit to be granted corresponds to half of the amount of the IAS;
- The attribution of the benefit obliges the employee to declare the beginning or resumption of independent activity with the tax administration, the effects of the corresponding framing in the social security system of independent workers and the maintenance of the exercise of activity for a minimum period of 24 months after the cessation of the payment of the benefit;
- The declaration of cessation of activity before the end of the period identified in the previous paragraph determines the refund of the amounts of the benefits paid.
F) Unemployment Protection Measures
- The following employees are entitled to initial unemployment benefit provided that have:
a) 90 days of paid employment, with the corresponding wage record, in a 12-month period immediately preceding the date of unemployment;
b) 60 days of paid employment, with the corresponding wage record, in a 12-month period immediately prior to the date of unemployment, in cases where the unemployment occurred due to the expiry of the fixed-term employment contract or the termination of the employment contract at the initiative of the employer during the trial period.
Simplifying access to social insertion income
- The allocation of the social insertion income benefit is not dependent on the conclusion of the insertion contract;
- At the end of the period of validity of the law that determined the simplification process, the entity managing the benefit shall make an officious verification of the composition and income of the household beneficiaries for the purposes of renewal or termination and, as a result, shall review the value of the benefit or terminate its attribution;
- Social income support for integration and unemployment protection is required until 30 June 2020 and cannot be combined with other social benefits.
G) Other measures
- Approval and display of the holiday map until April 15 may take place up to 10 days after the end of the state of emergency;
- Extension of fixed-term contracts (with teaching and non-teaching staff at service of the Ministry of Education public schools) with termination on August 31 2020;
- Suspension of the requirement regarding the non-existence of debts for applicant entities or promoters to the IEFP, I. P. training program. To this end, debts incurred by the applicant or promoters, from 1 March 2020 to 30 June 2020 will not be considered;
- Strengthening of the means and powers of the Authority for Working Conditions, namely by contracting external services to assist in the execution of its activity;
Possibility of a labour inspector, when verifies the existence of signs of unlawful dismissal, to draw up a report and notify the employer to regularize the situation. With the notification to the employer and until the employee’s situation is regularised or the judicial decision has been finalised, as the case may be, the employment contract in question will not be terminated, and all the rights of the parties will remain, namely the right to remuneration, as well as the inherent obligations towards the general social security system.
Regarding this matter, the labour courts shall have jurisdiction to provide a judicial decision;
- The deadline for the payment of contributions and levies due in March 2020 is, exceptionally, extended until 31 March 2020. Without prejudice to this provision, employers who have not paid one third of the contributions due in the first month of adhesion to the measure, March or April as applicable, and who immediately proceed to the payment of this amount plus interest on arrears shall retain the right to deferment of the payment of contributions;
- Possibility for the collective executive bodies of public professional associations that exercise management and management powers to decree the suspension or reduction of their members’ membership fees, without the need for resolution by the respective representative assemblies;
Until September 30, 2020, the hiring of workers is authorized for the establishment of fixed-term employment relationships, for a period of four months in the entities of the Ministry of Health, and its renewals are made for equal periods;
Telework regime may be determined unilaterally by the employer or by employee’s request, without the need of agreement by the parties, provided that it is compatible with the functions performed;
In the current context of COVID-19 disease, and exclusively for reasons of protection of one’s own health and of others, body temperature measurements may be taken to employees for the purposes of access and permanence in the workplace;
The provisions do not affect the right to individual data protection, and it is expressly prohibited to record the body temperature associated with the identity of the person, unless expressly authorized by the person;
If the normal body temperatures are higher than normal body, that person’s access to the workplace may be prevented.
H) Measures to support start-ups
New measures relating to Portuguese start-ups, in order for these entities to overcome the consequences of the Covid-19 pandemic and to continue their normal activity after this exceptional period (representing an overall support of more than EUR 25 million and an average of EUR 10,000 euros per start-up):
- Start-up RH Covid19 measure, under which financial support will be granted through an incentive equivalent to one minimum wage per employee, up to a maximum of 10 employees per start-up;
- Extension for 3 months of the previous scholarship benefit already awarded, in the amount of EUR 2,075 per entrepreneur job;
- The “Incubation Voucher – Covid-19”, applicable to recent start-ups (incorporated less than 5 years ago), through the hiring of incubation services based on a non-refundable incentive of EUR 1,500;
- Convertible loans in amounts between EUR 50,000 and EUR 100,000 per start-up, to be converted after 12 months at a discount rate that avoids dilution of shareholders;
- Portugal Ventures issuing a call for investments in start-ups, with tickets starting at EUR 50,000 (this initiative being funded through the Instituição Financeira de Desenvolvimento (IFD), Portugal Ventures and Imprensa Nacional – Casa da Moeda); and
- Two support measures already in force and applicable to start-ups were revised, as follows: (i) within the 200M Fund, co-investment with private investors in Portuguese start-ups and scaleups, with a minimum amount of public funds of EUR 500,000 and a maximum of EUR 5 million, and (ii) within the co-investment fund for social innovation, the co-investment with private investors in companies with innovative projects with a social impact, with a minimum amount of public funds of EUR 50,000 and a maximum of EUR 2.5 million.
Note: During the state of emergency, social security services, Working Conditions Authority, Directorate General for Employment and Labour Relations , Institute for Employment and Vocational Training, Commission for Equality at Work and Employment and the National Institute for Rehabilitation remain open on presential regime .