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On 28 May 2021, Royal Decree-Law ("RDL") 11/2021 concerning urgent measures for protecting jobs, boosting the economy, and protecting the self-employed came into force.

I.  Extension of ERTEs based on force majeure grounds

1. ERTEs due to force majeure, effective from 28 May 2021

ERTEs are Spain’s temporary job retention schemes. ERTEs due to force majeure have been extended until 30 September 2021.

Companies may be entitled to reductions on their social security contributions. See section IV for further details.

2. ERTEs due to impediment, effective from 28 May 2021

ERTEs due to impediment (i.e. those taken by businesses who were prevented from continuing their business activities due to government COVID-19 restrictions or measures) have also been extended until 30 September 2021. The terms set out in the relevant decisions approving them continue to apply (whether approved expressly or following administrative silence).

The reductions in Social Security contribution rates which are to be applied to these ERTEs, between 1 June and 30 September 2021, are determined by the numbers of staff registered with the Social Security system. If there were fewer than 50 workers, or assimilated individuals*,  registered with the Social Security system as of 29 February 2020, then the company’s contribution is reduced by 100 %. If there were 50 or more, then a 90 % reduction applies.

3. ERTEs due to limitation, effective from 28 May 2021

ERTEs due to limitation (i.e. those taken by businesses whose normal business activities were limited due to government COVID-19 restrictions or measures) have also been extended until 30 September 2021.

The reductions in Social Security contribution rates which are to be applied to these ERTEs, between 1 June and 30 September 2021, are as follows:

Number of workers or assimilated individuals, registered with the Social Security system, as at 29 February 2020

Month

% reduction of company’s contribution

Fewer than 50

  June

  85%

  July

  85%

  August

  75%

  September

  75%

50 or more

  June

  75%

  July

  75%

  August

  65%

  September  

  65%

II.  Suspension and reduction of working hours based on economic, technical, organisational or production grounds ("ETOP") as a result of COVID-19

Employers may begin applying for an ERTE ETOP - because of COVID-19 reasons - whilst an ERTE due to COVID-19 force majeure is still in force. The ETOP ERTE will be put into effect on the day the force majeure ends.

III.  ERTE due to impediment and ERTE due to limitation, which began between 1 June and 30 September 2021

  1. Application for a new ERTE based on impediment or limitation:

Companies which are affected by COVID-19 restrictions and measures between 1 June and 30 September, may apply for an ERTE due to impediment or limitation of business activities, using the terms set out in section 2 of the RDL 30/2020.

  1. Transition between ERTE due to impediment and ERTE due to limitation:

Companies which have already been granted an ERTE can change from an impediment situation into a limitation situation, or vice versa, without having to file for different proceedings (without prejudice to the requirement to meet certain notification obligations). The relevant reduction percentages apply at all times, based on the impediment or limitation nature of the company’s situation.

IV.  ERTE in sectors and companies specially affected by COVID-19

Some of the companies which may be entitled to reductions in Social Security contribution rates are as follows:

A) Companies with an ERTE due to a force majeure extension, where their business activity is classified under any of the codes of the National Classification of Economic Activities (CNAE).

B) Companies mentioned in section II above, which transition from an ERTE due to force majeure into an ERTE ETOP, between 1 June and 30 September 2021.

C) Companies whose ERTEs due to force majeure extended automatically, as a dependent of another company as part of the value chain. (This means companies whose turnover, during 2019, was at least 50 % generated by business carried out directly with companies who have been specially affected by COVID-19.)

Regarding the reduction in social security contributions, it is important to note the distinction between:

  1. The reduction of contributions regarding workers affected by an ERTE who resume activities from 1 June 2021, or who would have resumed their activities from the effective date of the RDL 18/2020. Here, contributions are determined by the numbers of staff registered with the Social Security system. If there were fewer than 50 workers, or assimilated individuals, registered with the Social Security system as of 29 February 2020, there is a 95 % reduction in the company's contribution. If there were 50 or more, then there is an 85 % reduction.
  2. The reduction in contributions for workers whose activities have been suspended between 1 June and 30 September 2021, are as follows:
  3. When there were fewer than 50 workers, or assimilated individuals, registered with the Social Security system as of 29 February 2020,  then an  85 % reduction in the company’s contribution accrued for June, July, August 2021 applies, and a 70 % reduction for that accrued during September 2021.
  4. When the number of workers, or assimilated individuals, registered with the Social Security system as of 29 February 2020, is 50 or more then the reduction is 75 % of the company’s contribution accrued for June, July, August 2021, and 60 % of that accrued during September 2021.

These reductions are not-compatible with the reductions established for ERTEs due to impediment  or limitation of business activities.

V.  Ancillary measures

  • In general, companies set up for tax purposes, in countries or territories classified as tax havens under current legislation, are not entitled to temporary redundancy plans linked with COVID-19.
  • Similarly, companies which apply for ERTEs as a result of COVID-19 and which use public resources allocated to them, may not distribute dividends for the tax year where these ERTEs apply, unless they have previously paid the amount corresponding to the social security contribution reduction, and as such have waived the exemption.
  • The prohibition on working overtime, further outsourcing of activities or contracting new employees during the application of the COVID-19 ERTEs, is extended until 30 September 2021.
  • The interruption of the term of temporary contracts affected by the ERTEs is extended until 30 September 2021.
  • Until 30 September 2021, force majeure, and any economic, technical, organisational and production-related grounds the ERTEs are based on, are not justifications for the termination of an employment contract or dismissal.
  • The "MECUIDA Plan" is extended until 30 September 2021.

Companies must effectively bring in workers with permanent discontinuous contracts and those performing fixed and periodic work repeatedly on certain dates during the theoretical call-up period, meaning the period of  work actually carried out between 1 June and 30 September 2019. In the event that restrictions prevent workers with a permanent discontinuous contract carrying out effective work during the call-up period, they will be counted under the ERTE. Extraordinary unemployment benefit will apply to the following cases: (i) where the call-up period is not between 1 June and 30 September 2021; (ii) during ordinary interruptions of the business activity when there is effective return; and (iii) in all other situations affecting workers with a permanent discontinuous or periodic fixed contract.

VI.  Employment commitment clause

The protection of employment obligation, under section 5 of the Royal Decree-Law 30/2020, is also extended, both in connection with previous periods and by virtue of the protection included in this regulation. Therefore, it should be as follows:

  • The commitment to preserve employment, contained in the provisions set out in RDL 8/2020, section 6 of RDL 24/2020, and in RDL 30/2020 itself, remain in force with the terms already agreed.
  • Companies that, under the provisions of RDL 11/2021, enjoy reductions in social security contributions will have to honor a new 6-month period to safeguard employment.
  • If the company is under a different commitment to maintain employment, which they are required to follow first, the commencement of this new obligation will take place when the original commitment ends.

VII. Effective date

This RDL entered into force on the date of publication in the Official Spanish Gazette, 28 May 2021.

*Assimilated workers are workers whose employment has been temporarily or permanently suspended or terminated e.g. because of forced leave, periods of inactivity between seasonal jobs, leave to care for dependents etc., but whose social security registration is maintained for the purpose of some social security benefits.