COVID-19: Exceptional measures on employment and Social Security matters are introduced by the new SESP in Portugal

1. Simplified furlough extended

The simplified furlough, according to the legal framework set forth on Decree-law no. 10-G/2020, of 26 March, is extended to the companies that are obliged to remain closed under Government’s determination. The remaining companies may extend the simplified furlough until the end of July 2020.

2. Progressive resumption support measure

It is introduced an extraordinary measure, to be in force until the end of 2020, to promote the companies’ activities resumption, by a State support, for companies that have implemented a simplified furlough.

This measure aims to put an end to any case of employment contract suspension, but keeping the possibility to have reductions of the employee’s working time period until the end of the year, as well as exemptions and reductions on Social Security Contributions, also until the end of the year. On the employees’ side, this measure aims to get the work income progressive reaching 100%.

The eligibility criteria and the different supports are summarized on the following table:

If companies benefit from this measure, they cannot:

• Have collective dismissals, dismissal due to extinction of work position or dismissals due to employee’s inadequacy during the period the measure is in force and on the 60 days after its end.

• Have profit distribution during the period the measure is in force.

3.     Exceptional financial assistance for company’s activity normalization

Companies that have had (i) a simplified furlough or (ii) an extraordinary training plan, can access a financial  assistance, under one of the following types:

a) One-off financial assistance:

• Assistance amount: 1 minimum salary for each work position that have been on simplified furlough;

• Specific conditions: company (i) cannot have collective dismissals, dismissal due to extinction of work position or dismissals due to employee’s inadequacy and (ii) must keep the employment level during the period the measure is in force and on the 60 days after its end.

b) Financial assistance during 6 months:

• Assistance amount: 2 minimum salaries (to be paid in 2 or 3 tranches during a 6 months period), as well as a 50% reduction on Social Security contributions on the first 3 months.

• Extra assistance: if on the 3 month after the assistance is granted there is net employment creation (when comparing with the homologous 3 months), the company may benefit from an exemption from Social Security contributions for 2 months proportional to the employment generated, provided that such employment creation is maintained for 6 months.

• Specific conditions: during the financial assistance and the following 60 days, the company (i) cannot have collective dismissals, dismissal due to extinction of work position or dismissals due to employee’s inadequacy and (ii) must keep the employment level during the period the measure is in force and on the 60 days after its end.

This assistance is not applicable to companies that have benefit from the progressive resumption support measure (detailed above in 2.).

4. Employee’s Stabilization aid

It is introduced a financial aid, to be paid in July to the employees that have had a decrease on their income due to the pandemic. This aid is applicable to employees with a February salary of up to twon minimum wages that had a loss on their base remuneration for being in furlough in one of the months between April and June 2020.

This aid is on an amount equivalent to the loss of income of one month in furlough, from € 100.00 to € 351.00.