02 Oct 2020

1st October

On the 30th September the Government published the extension of ERTES and the aid to self-employed until January 31st 2021.

Here we highlight the conditions.

Existing ERTES caused by Force Majeure

The current employment regulation files, based on force majeure, in accordance with Article 22 of Royal Decree 8/2020, are automatically extended until January 31, 2021. They will only be exempt from Social Security if their activity is found in the List of published CNAES in the Annex published.

ERTEs caused by impediment or limitation of activity

Those businesses from any sector or activity that find themselves unable to carry out their business activity as a consequence of the new restrictions or adopted measures as from 1st October 2020, such as nightclubs, will be able to take advantage of the benefits of an ERTE.

These businesses should apply for an “ERTE caused by impediment” and will  benefit from an exemption of the Social Security staff contributions during the closure period up until the 31st January 2021:

  • 100% exemption  – less than 50 employees
  • 90% exemption – more than 50 employees

Those businesses that are limited to be able to carry out their activity en some of the work centres as a consequence of the decisions or adopted measures by the Spanish Authorities will be able to apply for an “ERTE caused by limitations“.

In this case, the exemption from Social Security for those employees who have been suspended will be the following:

 OCTOBER 2020  NOVEMBER 2020  DECEMBER 2020  JANUARY 2021  
LESS THAN 50 EMPLOYEES  100%90%85%80%  
50 EMPLOYEES OR MORE90%80%75%70%  

Companies belonging to sectors with a high coverage rate due to temporary employment regulation files and a low activity recovery rate

These businesses have been classified in accordance with their CNAE (activity commercial code used for each sector).  This list is on the Annex of the publication and includes, hotels, transport companies, travel agencies etc.  Other businesses that do not figure on the list but consider that 50% of their turnover depends directly or indirectly on the businesses on this list can also be considered in the same way.  This ERTE can be extended until the 31st January 2021 and will benefit from 85% exemption of staff social security for less than 50 employees or 75% exemption for 50 or more employees, during the months October to January inclusive.

Those companies not included on the list but have been affected directly or indirectly by these companies will have from the 5th to the 19th October to prepare their application.

Maintenance of the workforce

The 6 month guarantee to keep the same workforce is still in place for the previous ERTE and AN ADDITIONAL 6 month period will be attached to the new ERTEs as from 1st October.  This then means a 12 month guarantee to keep the existing workforce for 12 months. 

Employees affected by the ERTE

Anyone who is dismissed during an ERTE will maintain their rights to unemployment benefit during the time they are entitled to “excluding” the time they have been in the ERTE.

People affected by an ERTE will have preferential treatment to be included in educational courses / training.

The payment received will continue to be 70% of their basic salary, which will be reduced to 50% after the first six months.

Assistance for self employed after 1st October 2020

Those self-employed workers who have been receiving the Unemployment Aid due to article 9 of the Royal Decree 24/2020, 26th June, will be able to continue receiving this until the end of January 2021, always when they maintain the same requirements established during the 4th quarter of 2020).  Those self-employed workers that did not receive any Unemployment Aid in the third quarter of 2020 will be able to apply for this if they meet the requirements.

The amount that they will receive is 50% of the minimum base of social security contribution.  This can be increased to 70% if a “large family”.   If several members of a family that live together have been affected by an ERTE then each person will only receive 40%.

The self employed social security payments will be exonerated.

Requirements for the above:

  • Total suspension of business activity as a consequence of the COVID-19 restrictions (ordered by a competent authority) or
  • 50% reduction of turnover in the 5th quarter of 2020 compared to the first quarter of 2020.

Information by E.B.F Consulting S.L.  E.B.F Consulting has been providing tax and accounting services to expatriates in Europe since 1999. Office is based in Lanzarote, Spain.  Visit www.ebfconsulting.com for more details. Copyright © E.B.F Consulting 2020 All Rights Reserved.