In order 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 work place 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, in order to maintain jobs and mitigate situations of business crisis (simplified lay-off).
What is a company in a business crisis?
Companies find themselves in a business crisis situation when it is proven that:
- There is a total shutdown of the business or establishment resulting from intermittent or interrupted global supply chains; or
- An abrupt and sharp revenue drop of at least 40%, in the 60 days prior to the request directed to Social Security with reference to the same period; 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 situation, the company must have its tax status regularized before Social Security and the Tax and Customs Authority.
Note: For companies in a situation of temporary closure or temporary reduction of activity due to the outbreak of COVID-19, but which are not in a situation of business crisis, the provisions of article 309.1 a) of the Labour Code should be applied, with the employee being entitled to 75% of the total payment of the employer, from which the amounts that the employee receives for another activity that he/she has started to carry out as a result of the shutdown or reduction of activity will be deducted.
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 the 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.
It can also be combined with a training scholarship in the amount of 30% of the IAS, totaling € 131.64: half for the worker (€ 65.82) and half for the employer (€ 65.82).
In order 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 submit an application, in its own model, stating the specific situation and certified by the Certified Accountant;
- 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 must provide proof that its tax status is regularized before Social Security and before the Tax and Customs Authority;
-The employer should list and identify the employees covered through their Social Security Identification Number (NISS).
- 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, in order 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 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 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 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 iefponline Portal, accompanied by the following documents:
- Certificate relating to the regularized tax status before the Social Security and the Tax and Customs Authority, preferably, authorization should be granted to the IEFP for this purpose;
- Copy of the salary statements submitted to Social Security in the month prior to the request, with the entity’s employees to be covered by the Incentive;
- Proof of IBAN;
- Declaration by the employer, accompanied by a certificate from the company’s certified accountant, to prove the business crisis situation in which it finds itself, provided that the company is required to have organized accounts.
- 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.
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.