Portugal: Amendments to the Sustainable Employment Commitment measure

Portugal - 

Ordinance no. 109/2023, of April 19 was published in the Official Gazette, introducing amendments to the Sustainable Employment Commitment measure (“Compromisso Emprego Sustentável”).

The Sustainable Employment Commitment measure was created by Ordinance no. 38/2022, of January 27, and consists on financial supports granted to employers that hire unemployed persons listed in the Portuguese Public Unemployment and Professional Training Agency (“IEFP”): financial support for hirings and financial support for payment of Social Security contributions.

For more information on the Sustainable Employment measure, click here.

In this regard, we highlight the following amendments:

1. Extension of eligible candidates

The extension of candidates eligible to benefit from this measure is done in two ways: (i) reducing the minimum period during which the applicant has to be listed in IEFP, and (ii) increasing the cases in which this minimum registration period is not necessary.

Therefore, to be eligible for this measure, candidates must be unemployed persons listed in IEFP for, at least, 3 consecutive months, thus reducing the minimum mandatory period (which was previously 6 months).

On the other hand, new cases are included in which the minimum listing period as unemployed in IEFP is not necessary:

  • Candidates with 35 or less years old;
  • Candidates with 45 or more years old;
  • Candidates under temporary protection;
  • Candidates that have completed an internship financed by IEFP on the last 12 months.

2. Maintenance of employment level check

To be entitled to the financial supports foreseen in this measure employers shall maintain employment contract at stake, as well as the employment level reached with it, at least, 24 months after the first month the employment contract came into.

For this purpose, the evaluation of the employment level is no longer done biannually. Instead, this evaluation will now be done up to the end of the 24-month after the first month that the employment contract came into.

On the other hand, it is established that the employer must communicate to IEFP, within 5 working days:

  • The termination of the supported employment contract, indicating if it intends to replace the employee; and,
  • Employment level decrease.

3. Extension of financial support increases 

The financial support amount for hirings is of 12 times the amount of the social support index (“IAS”). Moreover, several cases in which the financial support is subject to an increase are established.

The financial support granted will now be increased in 25% on the following cases:

  • If the base remuneration associated with the employment contract is equal to or higher than EUR 1,330.00;
  • If the candidate hired is a long-term unemployed person.

4. Maintenance of the financial support

It is now possible for the company to maintain financial support in case of termination of the supported employment contract, provided that the employee is replaced by another eligible unemployed person.

5. Extension of the decision period

The deadline for IEFP to issue a decision on the applications submitted is increased from 20 to 30 working days, counting from the date of application’s submission.

This new deadline is applicable to applications submitted from May 1st, 2023, onwards.

6. Articulation with “Employment Prize” (ATIVAR.PT Internships measure)

While the Sustainable Employment Commitment measure is in force, applications to the Employment Prize (“Prémio ao Emprego”), under ATIVAR.PT Internships Measure (“Medida Estágios ATIVAR.PT”), introduced by Ordinance no. 206/2020, of August 27, will not be accepted (for more information on this measure, click here).

However, this does not apply to applications for the Employment Prize that were already under analysis, decision or execution on April 20, 2023.