COVID-19: Protection under ERTE temporary layoff procedure system extended until February 28, 2022, approval of new minimum wage and other employment measures

Spain - 

Spain Labor and Employment Alert

The government and representatives of workers’ and employers’ organizations have sealed the VI Labor Relations Agreement on the Protection of Employment adopting a number of measures targeted at extending the ERTE COVID-19 temporary collective layoff procedures . An increase in the minimum wage and other important measures from a labor standpoint have also been published.

The key elements of the new pieces of labor legislation published on September 29, 2021 are described below:

1. Extension of the ERTE collective layoff procedures and other measures in the VI Labor Relations Agreement on the Protection of Employment (VI ASDE)

Royal Decree-Law 18/2021, of September 28, 2021, on urgent measures for the protection of employment, economic recovery and improvement in the labor market (RDL 18/2021), which came into force on its publication date, contains the VI ASDE labor relations agreement, bringing the following key new provisions:

  • It retains the ERTE temporary collective layoff procedure model for procedures in effect on September 30, 2021, which will require authorization from the competent labor authority for their extension (after an application has been filed). These extensions may be in effect until February 28, 2022.
  • Companies affected by new restrictions and containment measures for the protection of health in the period between November 1, 2021 and February 28, 2022 may apply for an ERTE temporary collective layoff procedure due to impediment or restrictions to activity. Companies are also allowed to make a transition from being in a situation of impediment to a situation of restriction or vice versa.
  • Companies implementing ERTE temporary layoff procedures due to restrictions may benefit from exemptions from social security contributions in the following percentages:

The minimum number of training hours that each worker must complete varies depending on the size of the company:

  • between 10 and 49 employees at the company: 30 hours
  • 50 and over 40 hours

The time period for carrying out the training activities will end on June 30, 2022.

In addition to these exemption benefits, companies that train individuals included in this type of ERTE temporary collective layoff procedure will be entitled to an increase in credit facilities to fund training activities, by reference to their size:

  • Between 1 and 9 employees: €425 per person.
  • Between 10 and 49 employees: €400 per person.
  • 50 or more employees: €320 per person.
  • Additionally, a 100% reduction to the employer’s share of social security contributions is allowed for any companies at which temporary layoff procedures due to impediment have been authorized and which have had to suspend operations, with respect to the workplaces and in the percentages of working hours affected by the suspension. These measures will start to apply in November 2021, and last over the period of closure of their operations, until February 28, 2022 at the latest.
  • The time period for protection measures under earlier legislation is extended:
  • The limits and provisions related to the distribution of dividends and fiscal transparency are extended until February 28, 2022.
  • The safeguarding of employment according to the provisions of Royal Decree-law 30/2020 is extended, both in relation to earlier periods and with respect to the benefits contained in the new legislation.
  • The limits and exemptions in relation to overtime, new recruitments and outsourcing will stay in place until February 28, 2022 and will apply also to the ERTE temporary layoff procedures under this new legislation.
  • Two other measures that will remain in force until February 28, 2021 are the provision preventing either force majeure or any of the objective reasons justifying ERTE temporary collective layoff procedures from being treated as reasons for dismissal (commonly known as the “dismissal ban”), and the second is the interruption of the calculation of temporary contracts affected by a suspension of the contract.
  • The MECUIDA Plan is extended until February 28, 2022.
  • Other additional measures related to unemployment are extended until February 28, 2022, including:
  • The right to receive contributory unemployment benefit, despite not meeting the necessary minimum period of employment.
  • Additionally, with the aim of protecting individuals whose jobs have been affected by the economic and health crisis in certain circumstances, the so called “Contador a cero” measure is retained. This measures consists of not counting the time in which unemployment benefit is received for the purposes of completing the maximum periods for receiving benefits for any workers who, before January 1, 2023, become unemployed as a result of termination of their contracts in certain circumstances.
  • The amount of unemployment benefit to be received will be equal to 70% of the computation basis, until February 28, 2022.
  • The new legislation retains the benefits for individuals included in a ERTE temporary collective layoff procedure with part-time contracts as well as the extraordinary benefit for individuals under permanent contracts for intermittent work.
  • A specific type of ERTE temporary collective layoff procedure is brought into effect, applicable to companies affected by the eruption of the Cumbre Vieja volcano on the island of La Palma and on any of the Canary Islands, with exemptions equal to up to 100% from social security contributions if the company is impeded from operating completely and up to 90% if its operations are restricted. The term for these measures will run between the date of the triggering event and February 28, 2020.
  • Lastly, a number of measures related to the protection of self-employed work have been published.

2. Minimum wage increase

  • The also newly published Royal Decree 817/2021, of September 28, 2021  determines the minimum wage for 2021, which it increases to €32.17 per day or €965 per month.
    This increase will take effect retroactively from September 1, 2021 meaning that the new minimum wage will have to be paid from that date.
  • The agreement struck with the labor unions on increasing the minimum wage in 2021 also provides that it will reach €1,000 per month on January 1, 2022 and €1,060 per month on January 1, 2023.

3. Other new labor provisions

  • Law 12/2021, of November 28, 2021, amending the revised Workers’ Statute, approved by Legislative Royal Decree 2/2015, of October 23, 2015, to guarantee the employment rights of individuals carrying out delivery work in the digital platform sector, which gives official approval to Royal Decree-Law 9/2021, of May 11, 2021. In our alert on May 12 we discussed the contents of this law which have not been amended in its passage through parliament.
  • Royal Decree 818/2021, of September 28, 2021, on integrated employment activation programs in the Spanish National Employment system.