Immediate extraordinary support to companies in Portugal, further to COVID-19 fighting measures

Immediate extraordinary support to companies in Portugal, further to COVID-19 fighting measures

TELEWORKING

Upon initiative either of the employer or the employee, and without the need of an agreement between the parties, provided it is possible professional activities will be carried out by teleworking whilst required. The employee maintains the obligation of working the number of hours set out in the employment contract or in the collective agreement. The employee is entitled to 100% of the salary.

 

SIMPLIFIED LAYOFF SET OUT UNDER MINISTERIAL ORDER 71-A/2020 OF 15TH MARCH AND 76-B/2020 OF 18th MARCH

Layoff is permitted by reducing the normal working periods or suspending the activity without suspending the employment contracts. It is an exceptional and faster measure to apply within a very short period upon the request of the employee in order to prevent the risk of unemployment.

Considering the Covid19 pandemic we are facing, the Government has defined the circumstances under which employees may apply for a simplified layoff and qualify for a financial support from the state.
A company is deemed in crisis:

1. Upon the complete stop of the company or the establishment’s activity which arises from the interruption of the global supply chains or from the suspension or cancelation of orders; or
2. Unexpected breakdown of, at least 40% of the invoicing in the 60 days prior to the request to the Social Security, against the same period or, in the event the activity has commenced less than 12 months ago earlier to the average of such period. Any of the above-mentioned requirements classifies the company in crisis which is verified by the declaration of the employer and certification of the company’s chartered accountant.

How does it work?
After having the opinion of the union delegate and the workers commission, if any, the employer must inform the employees in writing of the decision of requesting the extraordinary measure of support to the maintenance of the employment contracts, mentioning the estimate duration thereof, and submitting immediately the request to the Social Security Institute together with the declaration of the employer and the certification of the chartered accountant.

EXTRAORDINARY SUPPORT TO EMPLOYMENT CONTRACTS MAINTENANCE IN THE EVENT OF COMPANY CRISIS

It is a financial support per employee granted to the company exclusively for the purpose of payment of salaries.

What do the employees receive?
i) 2/3 of the gross remuneration up to the maximum limit of € 1.905,00, and, in any event the minimum amount equivalent to €635,00;
ii) 70% of the remuneration is paid by the Social Security and 30% is paid by the employer.

For one month, that can be extended up to 6 months, the company is entitled to a financial support to be paid by the Social Security.

The company can also benefit from incentive extraordinary measures for supporting to the normalization of the company’s activity to be granted by the Institute of Employment and Professional Training, I.P. (IEFP), on the amount of a minimum wage per employee. For such purpose the employer must present na application to the IEFP together with the declaration of the employer and the certification of the chartered accountant.

While measures are in force the Employers benefitting thereof are exempt from contributions to the Social Security regarding to employees covered by the measures and to the members of the statutory bodies.

Nevertheless, employers are obliged to file the autonomous declarations of remuneration regarding the employees covered by the measures and must pay the respective contributions.

 

CASH-FLOW SUPPORTING MEASURES AND INCENTIVES TO COMPANIES

• “LINHA CAPITALIZAR – COVID-19” – to support companies whose activity is affected by the economic effects arising from the pandemic. With an allocation of 200 milion euros to operating fund (“Fundo de Maneio”) and cash-flow plafond (“Plafond Tesouraria”), this line operates by order of filing of application with an approach of first come first served.

Plafond Tesouraria”:

  • € 1,5 million.
  • Maximum term – up to 3 years.
  • Fixed Interest Rate Swap Euribor for the term of the operation + spread.
  • Variable Interest Rate Euribor 1, 3, 6 or 12 months + spread.
  • Spread – 1,943% – 3,278%.
  • Bonification of the Interest Rate – 0%.

Fundo de Maneio”:

  • Maximum Financing per Company – € 1,5 million.
  • Capital Repayment – Equal Instalments, monthly, quarterly or bi-annual and paid in the end of the term.
  • Maximum term – up to 4 years.
  • Carência de Capital Máxima – Até 12 meses.
  • Fixed Interest Rate Swap Euribor for the term of the operation + spread
  • Variable Interest Rate Euribor 1, 3, 6 or 12 months + spread.
  • Spread – 1,928% -3,278%.
  • Bonification of the Interest Rate – 0%.

 

LINHA DE APOIO À TESOURARIA PARA MICROEMPRESAS DO TURISMO – COVID-19 This support line with na allocation of 60 million euros, intends to support touristic microenterprises with weak capacity to react to the current demand reduction by means of a reimbursable financing without remunerating interests. Eligible companies are those that evidence that the activity has bbeen negatively affected by the pandemic COVID-19.

EXTRAORDINARY FINANCIAL INCENTIVE TO ASSURE THE ACTIVITY’S NORMALIZATION PHASE

Eligible companies are:
i) Companies closed by the health authority;
ii) Companies in simplified layoff;
iii) Não estando constrangidas na sua capacidade de laboração, careçam de apoio para garantir a manutenção dos postos de trabalho em fase de normalização da atividade.

The incentive
i) Support in the payment of salaries in the activity normalization phase;
ii) Maximum amount of € 635,00 per employee;
iii) Total exemption of contributions regarding the month(s) when support is granted.

EMPLOYEES IN ISOLATION – HOW DOES IT WORK?

Provided employees can telework they will be entitled to the full amount of their remuneration to be paid by the employer.

And what if a company has employees in isolation?
In the event there is an employee infected with COVID-19, the health authority shall contact the employer in order to identify the employees that may be deemed as close contacts of the infected employee and determine their isolation.
The health authority with jurisdiction in the company geographical area issues a declaration for each employee in isolation.

HOW TO PROCEED IN ORDER TO ISSUE DECLARATIONS OF ISOLATION?

The company must fill in the appropriate Social Security form identifying employee in isolation and attach the respective declaration of the Health authority.
The form and the declarations must be filed in the Social Security webpage “Perfil->Documentos de prova->Assunto: COVID19->Escolher e anexar ficheiro-> Breve descrição, no campo Texto”.

EMPLOYEES PREVENTED FROM WORK BY ORDER OF THE HEALTH AUTHORITY DUE TO RISK OF INFECTION – WHAT TO DO? WHICH ARE THEIR RIGHTS?

The employee exposed to infection and with medical instructions to be in isolation or that is already in isolation must request to the health authority a declaration. He is entitled to a subsidy equivalent to a sickness benefit in the amount 100% of his remuneration during the isolation period.

The health authority declaration shall be sent to the employer who must sent it to the social security within 5 days.

EMPLOYEES ASSISSTING CHILDREN UNDER 12

Parents or grandparents assisting children under 12 are entitled to receive the respective allowance that must be requested in the social security webpage – Segurança Social Direta (SSD) and sent to the employer who must sent it to the social security within 5 days.

Amount of the allowance?

  • Up to the entry into force of the 2020 State Budget, the daily amount of the allowance is of 65% of the remuneration.
  • After the entry into force of the 2020 State Budget, the daily amount of the allowance is of 100% of the remuneration if the employee is a parent and of 65% if the employee is a grandparent.

EMPLOYEES THAT MUST STAY AT HOME ASSISTING CHILDREN UNDER 12 DUE TO THE SUSPENSION OF SCHOOL ACTIVITIES (AND THAT CANNOT TELEWORK)?

Employees must present a declaration available in the social security webpage – Segurança Social Direta – to the employer who shall sent it to the Social Security. The employer must confirm that there are no conditions for teleworking.

Absences are deemed justified provided it is not a period of scholar vacations.

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