New training and apprenticeship contract and youth job incentives

Automatic summary, not yet reviewed

1. A new training and apprenticeship contract is created for young people aged 16 to 25 with no professional qualification. It combines paid work at a company with training at a learning center, and includes full labor rights and Social Security protection.
2. Companies that sign these contracts with unemployed people registered before August 16, 2011 will get reductions in their Social Security contributions: 100% if they have fewer than 250 workers, and 75% if they have 250 or more. If they turn the contract into a permanent one, the reduction is €1,500 per year for three years, or €1,800 if the worker is a woman.
3. The decision on a workers' capitalization fund is postponed: the Government will negotiate with employers and unions in the first half of 2013. Meanwhile, the rule under which the Wage Guarantee Fund pays part of the severance pay in certain dismissals is extended until December 31, 2013.
4. New deadlines are opened to convert temporary contracts into contracts promoting permanent hiring: until December 31, 2011 for those signed before August 28, 2011, and until December 31, 2012 for later ones, as long as they have lasted no more than six months.
5. The rule that made workers permanent after chaining temporary contracts within certain time limits is suspended for two years, to keep companies from failing to renew those contracts.
6. The professional retraining program for people who exhaust their unemployment protection is extended by six months. It combines training activities with a financial allowance. It covers those who exhaust their benefit or subsidy between August 16, 2011 and February 15, 2012.

Who it affects

• Young people aged 16 to 25 with no professional qualification: They can sign the new training and apprenticeship contract, with paid work and training. Until 2013 it also covers those aged 25 to 30.
• Companies: They get reductions in Social Security contributions for hiring young people and for turning those contracts into permanent ones.
• Unemployed people who exhaust their benefits: They can join the retraining program with a financial allowance for six more months.
• Workers with chained temporary contracts: For two years they do not become permanent workers just by chaining temporary contracts.
• Self-employed workers: The rules on their benefit for ending their activity change, including for dependent self-employed workers who lose their main client.

Words worth knowing

Contrato de fomento de la contratación indefinida

A type of permanent contract with special conditions designed to encourage companies to hire on a stable basis.

Fondo de Garantía Salarial

Wage Guarantee Fund: a public body that pays workers unpaid wages and part of their severance pay when the company cannot.

Prestación contributiva

The unemployment benefit paid to people who previously contributed to Social Security.

Subsidio por desempleo

A smaller unemployment allowance for those who have exhausted the main benefit or have not contributed enough.

Cualificación profesional

Professional qualification: the knowledge and skills that enable someone to do a trade or profession, certified by a title or certificate.

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