Legislative news regarding workers during COVID-19
We know that with the pandemic caused by COVID -19 and the State of Emergency that was recently decreed by the Portuguese Government, there are many doubts about the quarantine and its relationship with the changes concerning the working conditions to be faced during this exceptional period. Based on the legislative news, we have made this article available with some specific clarifications with the intention of helping anyone who is looking for a greater understanding of their rights in this moment. Here are some explanations on some of the ways that the Government wants to help workers, their conditions and requirements:
CHILD CARE SUBSIDY (in the context of the exceptional situation caused by COVID-19)
With the arrival of COVID-19, one of the first measures taken by the Portuguese Government was to close all classes in schools and daycare centres, which consequently changed the family dynamics of many parents who work outside home, since, in most cases, one of the parents had to stay at home with the children.
What is it? It is a financial support provided to one of the parents so that he/she can stay at home with their children due to quarantine (a child infected with the virus) or due to the end of school activities.
How it works? In the case of private workers, Social Security, together with the paying entity, share the amount to be paid. The value of the instalments is based on the base salary of the worker and will depend on the reason why the parent would be at home with the children: in cases where the children are in quarantine, the amount to be received through the subsidy is 100%, whether private or public worker (rule resulting from a recent change, in view of the entry in April of the budget for the year 2020 – OE2020). If the reason is the termination of school activities, the amount of the subsidy will be 2/3, that is, 66% of the worker’s base salary. For more details: http://www.seg-social.pt/subsidio-para-assistencia-a-filho
Who has this right? Parents who have children under 12 years of age, or who, although over 12 years of age, suffer from a chronic illness or are people with disabilities. The allowance cannot be provided to the worker’s partner who has adopted the “teleworking” regime, and the family unit cannot benefit from both support measures at the same time.
- As for assistance to grandchildren, the percentage of 65% remains. It didn’t increase with the entry of the 2020 budget.
WHAT IS TELEWORKING?
What it is: The so-called “teleworking” is a form of job in which the worker can provide his services outside the regular work environment, outside the company, usually at home.
How it works: The teleworker uses different means of technology to perform the same service that he/she performed in his normal work environment, but doing it from another location (teleworking is usually done at home). When the worker adopts the teleworking regime, his remuneration remains the same, it will not be reduced. However, as for the food allowance, it will depend on whether the worker has meals outside home; each case must be analysed individually. The courts have been deciding favourably on the maintenance of the food subsidy, which compels companies to follow this understanding.
Who has this right: All workers who are able to carry out their work routine in another location will have the right to adopt the teleworking regime, mandatorily. In other words, it is not an option of the employer to defer or not to adopt the teleworking regime. They may only analyse whether the working conditions are compatible with the regime or not. Once they are compatible, the right to telework will be guaranteed. In addition, according to article 6 of Decree no. 2-A / 2020, of 18 March, the employment relationship that the worker maintains with the employer is not a factor that can prevent any adherence to telework. Any type of bond that the worker has with the employer allows the employee to have the right to telework (provided that, again, their functions meet the conditions required for the adoption of the regime).
- Workers in prophylactic isolation vs. teleworking: if the worker is in prophylactic isolation or quarantine and is unable to do the work at a distance, this specific case must be documented in a specific form by a public health authority. With this certificate, the worker will be entitled to receive a sickness benefit equivalent to 100% of his basic remuneration, but will not be entitled to the food allowance.
Another support in a crisis situation, especially in the exceptional context in which we are all living, is the popularly called “Simplified Lay – Off”. Find the explanation below:
EXTRAORDINARY SUPPORT FOR MAINTENANCE OF EMPLOYMENT CONTRACT IN SITUATION OF BUSINESS CRISIS (Decree – Law N. 10- G , 2020)
What is it: According to the new legislation, the so-called simplified lay-off is a right that the company and the individual entrepreneur have, as they are going through a period of crisis. They may resort to this regime in search of financial support.
How it works: During the period in which the company or individual entrepreneur uses this measure, Social Security will pay a large part of the wages and the Christmas subsidy for its workers. When a company or sole trader opts for the lay-off regime, they can resort to two measures: suspend employment contracts and / or temporarily reduce the hours of their employees.
To apply for the lay-off regime, the employer must first contact the union delegates and workers’ commissions and must make a written communication to their employees containing information such as duration, salary issues and other clarifications.
After the first step described above, the employee must submit his/her application to the Social Security Institute, the IP (ISS, IP), through Direct Social Security, the document being signed by the employer and certified by an accountant who must be consulted. In addition, the employer must also submit a list (in an Excel file) with the names of the workers who will be affected by the measure and their respective social security numbers. To ask for the lay-off regime: http://www.seg-social.pt/layoff-covid-19
As for workers’ wages, they will be reduced up to two-thirds (which would be 66% of the base amount), with 30% of this amount being paid by the company itself and 70% will be paid by Social Security. This is the minimum to which the worker will be entitled; as for the maximum amount, this amount would be up to three times the Minimum Guaranteed Monthly Remuneration – RMMG. Remember that the resulting amount can never be lower than the national minimum wage, which currently stands at 635 euros.
Who has the right: Companies or sole entrepreneurs, who apply for this support in cases of partial or total closure of the company’s activities in view of the pandemic or when the company has fallen by at least 40% of its revenue. In addition, the company may not have debts to the tax authorities or to Social Security, however, debts that were acquired in March this year are not counted.
- The worker will continue to pay IRS and Social Security. There is no postponement of taxes. Unlike companies, which will have total exemption from contributions (23.75%) to Social Security;
- The worker who works for a lay-off company cannot be dismissed while the company is using the measure. In addition, the worker remains covered by the measure for up to 60 days. That is, after the end of the lay-off regime, the worker will still be under the same protection for up to 60 days. Exceptions: when it is the case of service commissions, fixed-term contracts (“green receipts” or if the worker is on probation) or dismissal due to a fact attributable to the worker.
Finally, we will address the Exceptional Support for Independent Workers, as well as, due to the recent change, the so-called Managing-Partners. Find the explanation below:
EXCEPTIONAL SUPPORT FOR INDEPENDENT AND MANAGING-PARTNERS:
Initially, self-employed workers, also called “green receipts”, could only avail themselves of financial support when they saw the total suspension of their activities or their sector. It so happens that, with the approval of the new Decree – Law no. 12-A 2020, there was an extension of these criteria. In addition, the new legal diploma was necessary so that the so-called “managing-partners” could also be included in the referred financial support, provided that they match certain criteria. This support, however, should not be misunderstood with others already mentioned in the body of this article, such as the simplified lay-off regime and the support created for parents who need to stay with their children at home.
What is it: Exceptional support for self-employed workers and managing-partners is a financial support that aims to help these people in situations of financial crisis.
Who is entitled and how it works: Support is provided to self-employed workers who have had a total stop in their activities or sector, or who have had their turnover reduced by at least 40%. This latter criterion was recently added in view of the new Decree-Law no. 12-2020, which can be consulted in its entirety at the link: https://dre.pt/web/guest/home/-/dre/131193442/details/maximized. Therefore, the pause of activities no longer needs to be total, making the support to include more independent workers in crisis situations. It should also be noted that this self-employed person cannot be a pensioner and needs to have tax contributions for 3 consecutive months or 6 interpolated in the last 12 months. For those who started their activities less than 12 months ago, the value is compared with the average for that period. In addition, self-employed workers who also have a contract with another company as “dependent workers” are excluded.
As for the managing-partners, support may be granted to the managing-partners of companies, as well as for members of statutory bodies of foundations, associations or cooperatives with functions equivalent to those, without employees, who are exclusively covered by the Social Security regime. In addition, those who had a turnover of less than 60,000 euros in the previous year.
The support lasts one month and is extendable monthly, up to the limit of six months, varying between 438.81 euros and 635 euros. In addition, it cannot be combined with other financial support previously described in the body of this article, that is, either the worker will avail himself of one benefit, or another, not having the right to have more than one at the same time.
- Tax payments can be postponed for businesses up to ten million euros by requesting an extension of the VAT (Portuguese IVA) and IRS term. Social Security discounts due in the months of April, May and June may be paid one third in the month in which it is due and the remaining two thirds in the months of July, August and September or in the months of July to December 2020;
- The submission of the quarterly statement remains mandatory;
- Self-employed workers and managing-partners will not be exempt from contributions since, again, support for them cannot be combined with other support measures nor does it gives the right to an exemption from the payment of Social Security contributions;
- Self-employed workers already had access to an application via Direct Social Security earlier this month, and applications must be made by April 15th. If requests are made until the indicated date, their support will be received still in April;
- In the case of managing-partners, the application is not yet available, but we await news very soon