Extension of COVID-19 labor aid and a fund for industry

Automatic summary, not yet reviewed

1. Temporary layoff schemes (ERTE) based on force majeure or on economic, technical, organizational or production reasons linked to COVID-19 are extended until September 30, 2020. During these schemes, overtime, outsourcing and new hiring are banned, with justified exceptions.
2. People affected by these schemes keep unemployment protection until September 30, 2020, and companies are exempt from paying the employer share of Social Security contributions at rates that vary by company size and whether workers resume activity or stay suspended.
3. Companies domiciled in tax havens cannot use these schemes, and companies that do cannot pay dividends for the fiscal year unless they repay the contribution exemption. Companies with fewer than 50 workers are exempt from this limit.
4. Self-employed workers receiving the extraordinary activity-cessation benefit on June 30 get a contribution exemption of 100% in July, 50% in August and 25% in September. They can also combine the benefit with self-employed work if their revenue drops by at least 75% in the third quarter.
5. An extraordinary activity-cessation benefit is created for seasonal self-employed workers, lasting up to 4 months and equal to 70% of the minimum contribution base, with strict registration and income requirements.
6. The Spanish Reserve Fund for Guarantees for Electrointensive Entities (FERGEI) is created to cover, on behalf of the State, the risks of medium- and long-term electricity purchase contracts of electrointensive industry. CESCE acts as managing agent and the fund is endowed with a minimum of €200 million.

Who it affects

• Companies and workers affected by COVID-19 temporary layoff schemes: Suspensions and reduced hours are extended, with unemployment protection and contribution exemptions until September 30, 2020.
• Self-employed workers: They receive contribution exemptions and can collect the activity-cessation benefit while continuing to work.
• Seasonal self-employed workers: They can apply for an extraordinary benefit of up to 4 months if they meet the requirements.
• Electrointensive industry (heavy electricity consumers): The State covers part of the risks of their medium- and long-term energy purchase contracts.
• Fishers and shipowners: Fishers' contracts must be in writing and shipowners must take out a repatriation insurance when entering foreign ports.

Words worth knowing

ERTE (expediente de regulación temporal de empleo)

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

Fuerza mayor (force majeure)

An unavoidable external cause that prevents the company from operating, such as a health ban.

Consumidor electrointensivo (electrointensive consumer)

A company whose production process uses a lot of electricity relative to its costs.

Cotización a la Seguridad Social (Social Security contribution)

Payment made by companies and workers to fund benefits such as unemployment or retirement.

Repatriación (repatriation)

The worker's return to their country of residence when they can no longer work on the ship.

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