October 21, 2020

more than 80% savings in Social Security contributions for the most affected companies


The negotiation of ERTE has a new proposal by the Government, which improves support with public resources to companies in ERTE in the sectors most affected by the COVID crisis, such as tourism and its auxiliary industry. The Social Security offer includes savings in the social contributions of the most affected companies “higher than 80%”, according to The world has advanced and confirm sources of social dialogue to elDiario.es. The Executive maintains its vision that efforts must be focused on sustaining the companies most limited by the pandemic, which despite their viability will not be able to recover even in the coming months. For the rest of the sectors, the Government would leave the door open for ERTE due to regrowth, if they are affected by the limitations that are being agreed to reduce coronavirus infections. The conversations with the unions and the employers’ association continue, with the main challenge of defining the fine print of both options.

Employers distrust Social Security about the cost of ERTE: "We have very serious doubts that your data is real"

Employers distrust Social Security about the cost of ERTE: “We have very serious doubts that your data is real”

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The pitfalls in the dialogue table are mainly focused on the competences of Social Security, which is the one that is leading the definition of the sectoral extension of the ERTE proposed by the Government and the offers in the exemptions in the payment of contributions social. In the matters headed by the Ministry of Labor, unemployment protection for workers in ERTE, there are more coincidences. All parties support eliminating the reduction of the benefit from 70% to 50% as of the sixth month in ERTE and there seems to be an agreement to prevent it from falling completely the so-called ‘counter to zero’ Starting in October, with a new job offer that would allow those affected to collect the benefit without consuming their future right to unemployment in the event that they end up unemployed this year. At the moment, the extension date that is imposed for the new extension of the ERTE is January 31.

The latest approach from Social Security assumes that some companies in ERTE would become more supported in the coming months in the payment of social contributions for their staff. In the last extension of the ERTE, until September, it was articulated a differentiated system of exemptions in Social Security contributions, which in the highest case reached 80% for new files due to virus outbreaks. In ERTEs due to total force majeure, whereby companies continue to be closed without recovering their activity, exemptions of 35% were established in September for companies with less than 50 workers and 25% for those with more than this staff.

The Ministry headed by José Luis Escrivá defends that protection must be improved for the activities most affected by the pandemic, such as tourism and its entire value chain (customers, suppliers and related activities that depend on the tourism sector), which are not able to reactivate nor will they do so in the coming months due to the limitations derived from the pandemic. For these most affected sectors, which are still under discussion at the dialogue table, Social Security offers exemptions in Social Security contributions from October “higher than 80%”.

The bosses and the unions have defended at first the reluctance to extend the ERTEs with a sectoral approach, for fear that it will leave unprotected companies that are affected by the COVID crisis but in a more indirect or less obvious way. The rejection of the sectoral extension is maintained especially at the moment from the employers’ associations, according to sources of the negotiation.

The challenge of defining the sectors most affected

The Ministry of Social Security puts on the table these more generous exemptions in quotas, with the challenge of defining at the negotiation table with social agents which activities will be able to benefit from them beyond the obvious ones, such as companies in the tourism sector and air transport, among others. The objective is that industries related to the most affected activities can be protected, including their suppliers and customers, and those affected by COVID in a less obvious way. The “generous” protection of companies that show that they are still very affected in their turnover by the pandemic with respect to their previous activity before this crisis is also negotiated at the table.

In addition, the Government proposes maintaining the protection in the quotas of the so-called ‘ERTE by regrowth’ and offers that they be interpreted in a “more flexible” way, an issue that is also to be defined. This type of files was enabled for companies that were affected by new restrictions to stop contagion from July 1. Given the active virus outbreaks and the rise in infections at this time in some regions, ERTEs due to outbreaks would benefit companies that were limited by new limitations against COVID. This mechanism is the one that the Government offers to support all sectors, without distinctions depending on the activity.

The Executive considers that by combining both tools, public support for the ERTE of the majority of companies and workers affected today by these mechanisms articulated at the beginning of the pandemic would be maintained. It should be remembered that the ERTE already existed in the labor regulations, but these files for COVID receive special treatment, with savings in social contributions for companies and more unemployment protection for affected employees. Slightly more than 700,000 workers continue in this type of ERTE, some 600,000 due to force majeure and more than 100,000 due to objective causes (the so-called ETOP), according to the latest figures offered by Minister Escrivá, out of the maximum of 3.4 million people who they became affected by them.

With the Executive’s proposal, the companies that are not included in the sectors that are defined as the “most affected” by the pandemic and those that are not limited by the restrictions against COVID would be dropped from the most advantageous conditions of the ERTEs due to COVID. contagions (ERTE by regrowth). They could benefit from ERTE if they wanted, but under the usual conditions established in labor legislation.

Sources of the negotiation point out that there are companies that have economic difficulties, which were affected by the COVID crisis like the rest at first, but whose situation is no longer so strictly connected with the pandemic. The Bank of Spain has recommended redirecting public aid, of the ERTE but also in other areas, so that public resources are focused on the direct victims of the pandemic, while they are withdrawn from companies with more structural difficulties.

Another point of conflict, which in this case faces unions and employers in a united way against Social Security, are the higher exemptions on workers who reactivate the companies compared to those maintained in ERTE. Social Security insists that it is a good mechanism to encourage job incorporations, while social agents demand to focus support in cases where the company cannot remove its workforce from the ERTE. In his opinion, companies do not reactivate employees because of these incentives in the listing but based on whether or not they have a demand, which would penalize companies that are in a worse situation.

The government, employers and unions will continue negotiating next week, which is already a delay in initial expectations, which sought to close an agreement this week. Tension between the parties has risen in recent days, in which businessmen have even accused the government of lying in the data on the cost of ERTE. The parties are approaching the limit to reach an agreement, before September 30, which is when the current conditions of the ERTE expire.

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