Portugal: New amendments to the Sustainable Employment Commitment Measure

Portugal - 02 / 05 / 2024

The amendments to the Sustainable Employment Commitment Measure are intended to enabling it to contribute to a real increase of employees' salaries, establishing minimum thresholds for the base salary to be paid to employees, and also adjusting the Measure to the current reality of the labor market.

The Sustainable Employment Commitment Measure was created by Ordinance no. 38/2022, of January 27^th, and consists in granting financial aid to employers who hire unemployed persons listed in the Portuguese Public Unemployment Agency (Instituto do Emprego e Formação Profissional, I.P.): financial aid for hiring and financial aid for the payment of social security contributions. For more information on the Sustainable Employment Commitment Measure, click here and here.

Ordinance no. 39-A/2024, of February 1^st introduced new changes to the Sustainable Employment Commitment measure, including the following:

1. Eligible candidates

All applicants for the Measure are now required to have been unemployed and listed in the Portuguese Public Unemployment Agency for at least 3 consecutive months. Applicants aged 35 or under or 45 or over – who were previously exempt from this requirement – will now also have to comply with it.

Employment contracts executed with young people aged 35 or under, with a level 5, 6, 7 or 8 of qualification in the National Qualifications Framework can only be supported through the AVANÇAR Program. For more information on the AVANÇAR program, click here.

Employment contracts executed with an unemployed person who have attended an internship supported by the Portuguese Public Unemployment Agency in the same entity or entity belonging to the same corporate group in the previous 12 months are no longer eligible.

2. Increase in the minimum monthly base salary

The minimum monthly base salary to be paid to the employee will be the equivalent to 2 Social Support Index (SSI), which is currently € 1,018.52.

If the employee receives a base salary equal to or higher than 3 times the SSI (currently € 1,527.78), the financial aid granted to the employer is increased by 25%.

This is intended to ensure that only employment contracts that contribute to the goal of increasing the salaries of employees in Portugal, set out in the Medium-Term Agreement on Improving Incomes, Wages and Competitiveness, are supported.

3. Financial support for hiring

The financial aid for hiring unemployed persons under this measure is the equivalent to 12 times the SSI, i.e., currently € 6,111.12.

These amendments enter into force on February 2^nd, 2024.