Covid-19 | Economic measures

On 17/03/20, the Spanish Government announced the following emergency economic measures to help businesses and workers during this difficult period:

Temporary lay-offs and short-time working (ERTE)

Force majeure / force majeure: companies that have to terminate temporary employment contracts or reduce working hours as a direct consequence of the declared state of emergency (e.g. compulsory shutdown of activities, closure of shops, no supply of raw materials, etc.) can apply to the authorities quickly and without much administrative hassle.

Productive, organisational and technical reasons: if employment contracts are temporarily dissolved or working hours are reduced as an indirect consequence of the declared emergency (e.g. less demand for products or services), this must first be agreed with a workers’ delegation. This delegation must be put together within 5 days, after which the application must be presented to the authorities within 7 days.

In both situations, the authorities will give their decision within 5-7 days.

The workers in question will receive unemployment benefits during the ERTE and they will have to be re-employed after the crisis under the same conditions as before.

Remittances of social security contributions

Companies with less than 50 employees (reference date 29/02/20) that use an ERTE as a result of force majeure / force majeure (see above) are exempted from paying employer contributions for inactive employees or reduced working days during the period that this ERTE lasts. For companies with more than 50 employees, an exemption of 75% applies.

A condition is that the workforce is maintained during the first 6 months after resumption of work.