MADRID – The Spanish government and the social partners reached an agreement on Monday for the extension and renewal of the ERTE work protection mechanism. ERTE under the current conditions has been extended by one month.
The month extension of the current ERTEs gives employers more time to prepare for any new temporary unemployment schemes. As different conditions will apply to the new ERTEs that come into effect from November 1. Such as a further training plan for the temporarily unemployed employee.
From 3.4 million to more than 250,000 temporarily unemployed
The unions had asked for extra this month because they feared the amendments would delay approvals. And also, that it would no longer protect the temporarily unemployed workers. At the peak of the pandemic, 3.4 million workers in Spain were on temporary unemployment benefits. This is compared to 253,969 as of September 15.
Not only are the ‘old’ ERTEs valid for one month longer, the new arrangement also applies until February 28, 2022. Furthermore, this is a month longer than the government originally proposed. However, difficult negotiations preceded the new agreement, which came into effect only a few days before the settlement date. Employer organisations could not agree with the training conditions that are linked to the ERTEs that come into effect after November 1. Social Security Minister José Luis Escrivá, however, insisted on the training requirement. Because more than a third of the currently temporarily unemployed will not return to their original job and will therefore have to work elsewhere in the labour market.
The government has ultimately decided to grant companies with 10 employees or more a 40% exemption from social security contributions for employees who temporarily have less work and for whom they do not provide additional training. That percentage is increased to 80% if they do provide education. For small companies this is 50% and 80% respectively. If there is temporarily no work at all for the employees, the exemption is always 100%. Employers with 10 to 49 employees must provide at least 30 hours of education for the exemption. For employers with 50 employees or more, that is 40 hours.
Employers and employees on La Palma fully protected
Both the benefit of 70% of the income and the conditions for eligibility for an ERTE will remain unchanged from November 1. Employers are also not allowed to allow employees to work overtime at the new ERTEs, to hire new staff, or to pay out a dividend.
Exceptional arrangements will be made for employers and employees affected by the volcanic eruption on the Canary Island of La Palma. Affected employees will receive full benefits and employers will be compensated 90 – 100% for paying social contributions.