The creation of the Contract-Generation measure introduces new incentives for hiring
Labor and Enployment Law Alert
On April 12, 2019 was published on Diário da República the Decree n. º 112-A/2019 that regulates the creation of the Contract-Generation measure (hereinafter “measure”), which consists on the assignment of financial incentives to indefinite and simultaneous hiring of young searching for their first job and unemployed of long and very long term.
This solution is part of the Government commitment to create active measures that stimulate the hiring and combat the youth and long-term unemployment and the job insecurity.
The following aspects are noteworthy:
The incentives consist on granting the combination of the following benefits: (i) financial support to the execution of indefinite employment contract, on the amount of 9 times IAS (Social Support Index); (ii) full or partial exemption of Social Security contributions to the employer (reduction up to 50% for a period between 3 to 5 years, depending on the specific case).
Are eligible for this measure, people who are registered at Institute for Employment and Vocational Training (“IEFP”) included on the following groups:
a)Young searching for their first job: up to 30 years, inclusive, that had never execute an indefinite employment contract;
b) Long-term unemployed: people with 45 or more years unemployed for 12 or more months;
c) Very long-term unemployed: people with 45 years or more, unemployed for 25 or more months.
Requirements for the incentives
a) Execute at least (i) two indefinite employment contracts, (ii) full or partial time, (iii) simultaneously with young searching for first job and long or very long term unemployed, being considered as simultaneous the execution - in a period of 6 months - of two or more indefinite employment contract with the recipients above referred.
b) Reach a total number of employees higher than the average number of employees registered on the 12 months before the first job offer register.
This Decree is effective as from April 13, 2019 and is applicable to all employment contracts entered into since that date.
On the first period of applications, are accepted, under the terms and conditions regulated on the measure, job offers registered since October 29, 2019.