Extension of COVID-19 furlough schemes through June 30, 2020

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1. Companies with a COVID-19 force majeure furlough scheme stay in total force majeure if they cannot resume activity, and in partial force majeure if they only recover part of it, in both cases until June 30, 2020. They must bring workers back as needed, prioritizing reductions in working hours.
2. Furlough schemes based on economic, technical, organizational or production reasons filed from the entry into force of this rule until June 30, 2020 are governed by Article 23 of Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. 8/2020. If they replace a force majeure scheme, their effects are backdated to the date the previous one ended.
3. The extraordinary unemployment protection measures in sections 1 to 5 of Article 25 of Royal Decree-Law 8/2020 remain in force until June 30, 2020, and those in section 6 until December 31, 2020.
4. Companies under a force majeure furlough scheme are exempt from paying the employer's Social Security contribution in May and June 2020, with different percentages depending on company size and on whether the force majeure is total or partial. To apply, the company must file a responsible declaration through the Sistema RED system.
5. Companies domiciled in tax havens cannot use these furlough schemes. Those that do use them cannot distribute dividends for the fiscal year unless they first repay the amount of the contribution exemption; this limit does not apply to companies with fewer than 50 workers as of February 29, 2020.
6. The Government may extend the force majeure furlough schemes if health restrictions remain after June 30, 2020. In addition, a tripartite monitoring committee is created with the Government, employers and unions to follow labor measures during the deconfinement process.

Who it affects

• Companies and entities with a COVID-19 force majeure furlough scheme: They can keep the scheme, total or partial, until June 30, 2020, and are exempt from part of their Social Security contributions.
• Workers affected by these furlough schemes: They keep the extraordinary unemployment protection, and the exempt period counts as contributed for all purposes.
• Companies starting furlough schemes for economic, technical, organizational or production reasons: Article 23 of Royal Decree-Law 8/2020 applies to them until June 30, 2020.
• Companies domiciled in tax havens: They cannot use these furlough schemes.
• Companies using these furlough schemes: They cannot distribute dividends for the fiscal year unless they first repay the contribution exemption, with exceptions based on size.

Words worth knowing

ERTE (Expediente de Regulación Temporal de Empleo)

A procedure allowing a company to temporarily suspend contracts or reduce working hours, similar to a furlough scheme.

Fuerza mayor (force majeure)

An unavoidable cause beyond the company's control that prevents it from operating normally.

Exoneración de cuotas (contribution exemption)

The company is released from paying part or all of its Social Security contribution.

Declaración responsable (responsible declaration)

A document in which the company declares it meets certain requirements, without needing prior authorization.

Paraíso fiscal (tax haven)

A country or territory with very low or no taxes, classified as such under Spanish law.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries