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Practical guide to the new furlough scheme for companies and workers

| News | Employment Law and Social Security

Alfredo Aspra and Pedro Alonso answer the practical questions about the new furlough scheme for companies and workers in a guide
1.- From 30th June 2020, what will be the situation of the furlough schemes requested under the COVID-19 regulations due to force majeure?

The validity of the furlough scheme will only be maintained due to force majeure processed under Royal Decree Law 8/2020, of 17th March, on urgent exceptional measures to deal with the economic and social impact of the COVID-19 until 30th September 2020 (RD l8/2020), provided that they have been authorised prior to the publication of the Royal Decree Law which will include the content of the II Social Agreement in defence of employment.

2.- Will the exemptions from social security contributions for furlough schemes due to force majeure continue to apply?

From July 1st, companies that continue their activities partially suspended as a result of a furlough scheme due to force majeure, will be able to benefit from the exemption of the contributions accrued in July (70%), August (60%) and September 2020 (35%) if they have less than 50 workers, percentages that represent 50%, 40% and 35% respectively for those with more than 50 workers. Companies that continue with their totally suspended activities can benefit from exemptions from social security.

3.- If new confinement measures derived from COVID-19 are established, could a company implement a furlough scheme by force majeure beyond June 30th?

Yes, through the regulation contained in the Workers' Statute. In addition, a series of exemptions from social security contributions are provided for in this case.

4.- From 30th June 2020, what will be the status of furloughs for economic, technical, organisational and productive (ETOP) reasons under COVID-19 regulations?

Firstly, furloughs for economic, technical, organisational and productive reasons in force at the time of publication of the Royal Decree-Law that will include the content of the II Social Agreement in defence of employment will continue to be applicable in the terms provided for in the final communication and until the term referred to therein. Likewise, and from the publication of the Royal Decree-Law that will include the content of the Second Social Agreement in defence of employment, it will be possible to implement a furlough for economic, technical, organisational and productive reasons under the COVID-19 regulations and until 30th September 2020.

5.- Can companies that implement a furlough for economic, technical, organisational and productive reasons benefit from exemptions?

Yes, they will be able to benefit from the exemptions foreseen for furloughs due to partial force majeure listed in question 2.

6.- What about the employment commitment?

For those companies that have implemented a furlough scheme due to force majeure, it will remain under the terms of the Sixth Additional Provision of Royal Decree Law 8/2020, of 17th March, on exceptional urgent measures to deal with the economic and social impact of COVID-19. This commitment to maintain employment will be extended to companies that process furloughs for economic, technical, organisational and productive reasons whenever they choose to take advantage of the extraordinary measures in terms of Social Security contributions, and will be applicable to them from the publication of the Royal Decree-Law that will include the content of the Second Social Agreement to safeguard employment.

7.- Are the exceptional measures for unemployment protection maintained?

Yes, the exceptional measures for unemployment protection linked to force majeure and furloughs for economic, technical, organisational and productive requested under the COVID-19 regulations will be maintained until 30th September 2020.

These measures include the recognition of the right to contributory unemployment benefit without the requirement of a minimum period of contributory employment and, likewise, the fact that the enjoyment of the benefit does not count for the purpose of consuming the maximum periods of receipt.

8.- During the implementation of a furlough scheme, can the staff work overtime? Can new contracts be written up? Could services be outsourced?

Both in the furlough scheme due to force majeure and in those implemented due to economic, technical, organisational and productive reasons, as a rule, no overtime or new hiring -direct or indirect- may be performed. Nor may activity be outsourced during the implementation of a furlough scheme. Failure to comply with this prohibition may lead to the imposition of sanctions by the Labour and Social Security Inspectorate.

Exceptionally, and after informing the workers' representatives, new hiring and outsourcing of services may be carried out, provided that the employees affected by the furlough scheme cannot carry out the contracted functions for objective and justified reasons.

9.- What happens to temporary workers affected by a furlough scheme?

The interruption in the calculation of the duration of temporary contracts suspended by a furlough scheme is extended.

10.- Is it possible to dismiss on the grounds of COVID-19?

No. Until 30th September 2020, force majeure or furloughs for economic, technical, organisational and productive reasons caused exclusively by COVID-19 does not justify the termination of employment contracts.

11.- Can a company that implements a furlough distribute a dividend?

Companies benefiting from the furlough due to force majeure and for economic, technical, organisational and productive reasons that use the public resources allocated to them may not distribute dividends corresponding to the tax year in which the ERTE applies, unless they previously pay the amount corresponding to the exemption applied to the social security contributions.

You can see the article in Expansión.

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