Bill extends COVID job aid and creates fund for industry

Automatic summary, not yet reviewed

1. The bill would extend until September 30, 2020 the temporary layoff schemes (ERTE) based on force majeure or on economic, technical, organizational or production reasons linked to COVID-19. During these schemes, overtime, outsourcing and new hiring are not allowed, with justified exceptions.
2. Extraordinary unemployment protection for people affected by these layoff schemes would run until September 30, 2020, and until December 31, 2020 for seasonal permanent workers. Companies must file collective benefit applications and report days worked each month.
3. Companies with layoff schemes would be exempt from paying the employer share of Social Security contributions, at rates that vary by company size and whether workers resume activity. Companies with a tax domicile in tax havens could not use these schemes, and companies using them could not pay dividends unless they repay the exemption.
4. Self-employed workers receiving the extraordinary activity-cessation benefit as of June 30 would get a contribution exemption of 100 percent in July, 50 percent in August and 25 percent in September. They could also combine the cessation benefit with self-employment if they show a drop in revenue of at least 75 percent in the third quarter of 2020 compared with 2019.
5. The bill creates the Spanish Reserve Fund for Guarantees for Electrointensive Entities (FERGEI), a fund without legal personality initially endowed with 200 million euros, so the State covers the risks of medium and long-term electricity purchase contracts of electrointensive consumers. CESCE would act as managing agent and the Insurance Compensation Consortium would manage the treasury.
6. The bill partially transposes EU Directive 2017/159 on work in fishing: it requires all fishermen's contracts to be in writing and shipowners entering foreign ports to take out insurance or a guarantee to ensure fishermen's repatriation. It also changes the chair of the Labor Inspectorate's ruling council, which would go to the head of the Ministry of Labor.

Who it affects

• Companies and workers affected by COVID-19 layoff schemes: They could keep suspensions and reduced hours until September 30, 2020, with unemployment protection and Social Security contribution exemptions.
• Self-employed workers: They could get contribution exemptions and activity-cessation benefits compatible with their work, if they meet revenue and income requirements.
• Self-employed seasonal workers: They could apply for an extraordinary activity-cessation benefit of up to 4 months if they meet the registration and contribution requirements.
• Electrointensive industries and energy producers: The State would cover part of the risks of their medium and long-term electricity contracts through FERGEI.
• Fishermen and shipowners flying the Spanish flag: Their contracts must be written and shipowners must take out insurance or a guarantee for repatriation in foreign ports.

Words worth knowing

ERTE (expediente de regulación temporal de empleo)

A procedure by which a company temporarily suspends its workers' contracts or reduces their hours.

Consumidor electrointensivo (electrointensive consumer)

A company whose production process uses a lot of electricity, so energy costs are key to its competitiveness.

Fondo carente de personalidad jurídica (fund without legal personality)

Money and resources set aside for a specific purpose that do not form a company or agency with its own legal existence.

Fijo discontinuo (seasonal permanent worker)

An employment contract in which the person works only at certain times of the year, without continuous hours.

Directiva (UE) 2017/159 (EU Directive 2017/159)

A European rule applying an international agreement of the International Labour Organization on working conditions in fishing.

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