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New benefits regarding admission of employees

06/21/2017
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It was published today in the Official Gazette the Decree-Law No. 72/2017, of June 21st, establishing incentives in case of admission of persons looking for their first job and long-term and very long-term unemployed persons, through partial or total exemption of the employer’s contributions to Social Security.

 
1. Employers covered
 
Private employers, included in Portuguese Social Security’s general regimen for employees.
 
The employers shall comply with the following cumulative requirements:
 
  a)   Being regularly constituted and duly registered;
  b)   Having no debts to Tax Authorities or Social Security;
  c)   Not salary debts to its employees;
  d)   Execute open-ended employment contracts (full-time or part-time) with the employee;
  e)   In the month of application to the benefits, having a total number of employees superior to the average number of employees in the previous 12 months.
 
2. Employees covered
 
  a)   Persons looking for their first job - persons with, at least, 30 years old that have never been engaged under an open-ended employment contract;
 
  b)   Long-term unemployed persons - persons registered in the Instituto do Emprego e da Formação Profissional (Portuguese Employment and Professional Training Institute) for, at least,12 months;
 
  c)   Very long-term unemployed - persons with 45 years old or over that age registered in the Instituto do Emprego e da Formação Profissional for, at least, 25 months.
 
3. Conversion of a term employment contract into an open-ended employment contract
 
Employers who convert term employment contracts into open-ended employment contracts are entitled to the benefits set forth in this Decree-Law.
 
4. Benefits
 
The benefits are the following:
 
  • Persons looking for their first job: 50% reduction of the employer’s contribution to Social Security for five years;
  • Long-term unemployed: temporary 50% reduction of the employer’s contribution to Social Security for three years;
  • Very long-term unemployed: exemption of the employer’s contribution to Social Security for three years.
 
5. Benefit transfer to another employer
 
Whenever the employment contract terminates, without any responsibility from the employee’s side, before the end of the benefit period, the new employer may be entitled to the benefit for its remaining period.
 
6. Application for benefits
 
The application for these benefits shall be presented through Social Security website, in the 10 days following the employment contract’s starting date, along with:
 
  a)   Copy of the employment contract;
  b)   Declaration issued by the employee, stating that he has never been engaged under an open-ended employment contract, in case of a person looking for his first job.
 
7. Entry into force
 
This decree-law enters into force on August 1st , 2017.

 

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