Proposal to extend the Social Security discount for permanent contracts

Automatic summary, not yet reviewed

1. The bill would expand the so-called exempt minimum in Social Security contributions for new permanent contracts: the first 500 euros of the monthly base for common contingencies would be exempt from contributions.
2. The benefit would go from lasting two years to four (48 months) per permanent contract, and would cover all common contingency contributions, both the employer's and the worker's share.
3. The benefit would also apply to temporary contracts that become permanent, which was not the case before.
4. It would be a bonus if the worker is registered in the National Youth Guarantee System, and a reduction for all other hired workers.
5. Companies would have to meet several requirements: be up to date on tax and Social Security obligations, have not carried out wrongful or unlawful collective dismissals in the previous six months, increase permanent employment, and keep the employment level for 48 months.
6. If the benefit is applied improperly, the amounts not paid in would have to be returned, with a surcharge and late-payment interest. If the employment level is not kept, part would be returned depending on the months elapsed, with no surcharge or interest.

Who it affects

• Companies that hire on a permanent basis: They could stop contributing for the first 500 euros of each worker's monthly base for 48 months, if they meet the requirements.
• Workers with a new permanent contract or one converted from temporary: Their employer would save part of the contributions, but their Social Security benefits would be calculated using the full contribution base, with no reduction.
• Young people registered in the National Youth Guarantee System: Their permanent hiring would qualify for a bonus compatible with other incentives under Law 18/2014.
• Beneficiaries of the Program for Activation for Employment: If they are hired permanently, it would be compatible with the financial support payment they receive.

Words worth knowing

Mínimo exento

Part of the salary exempt from Social Security contributions, which makes the contract cheaper for the employer.

Contingencias comunes

Contributions covering ordinary benefits, such as health care and retirement, as opposed to workplace accident coverage.

Bonificación

A discount on the contributions the company pays to Social Security.

Reducción

A lowering of the base on which contributions are calculated, which also lowers what is paid.

Despido colectivo no ajustado a Derecho

A collective layoff of many workers at once that a court declares unlawful.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries