July 10, 2020

The Government is considering exempting companies and the self-employed from paying contributions and is studying paying widespread unemployment


The Government is finalizing the economic measures of its shock plan that it will approve tomorrow in the Council of Ministers, including some of the most awaited by businessmen, self-employed workers and unions. According to sources consulted by LA RAZÓN, the Executive would be willing to assume the concession of unemployment benefit for all productive sectors -including the self-employed due to cessation of activity, for which the procedures will be streamlined and smoothed-, and would do so without requiring grace period, minimum terms or insufficient contributions. In addition, the temporary suspension of the payment of contributions to the companies involved in closings and employment regulations, and self-employed workers with their dependents who have paralyzed their activity, would be approved, and special legislation would be passed through express measures to speed up the regulation of temporary employment (ERTE) by causality. Lines of credit and guarantees will also be approved by the Official Credit Institute (ICO) for those companies that request it to meet their expenses due to lack of income – with a volume of 30,000 million euros, expandable by another 20,000 if it were necessary-, with a reduced interest and with a repayment period to be determined, but which will be “very broad”, explained the same sources. In this way, the Executive will attend to the requests requested by the social agents – employers and unions – that They sent their own agreed-upon action plan, which included these and other additional measures, which appear to have been addressed.

The self-employed organizations -ATA, UPTA and Uatae- also sent their own proposals, being one of the sectors where the impact of this crisis is going to be more virulent. The two main requests were for an unemployment benefit to be recognized directly and for social contributions to be halted at 100%. Both, according to sources close to the Government, have been treated, in the absence of official confirmation.

At the moment, it has not been revealed whether the new government measures will apply the temporary suspension of monthly payments for gas, electricity, water and mortgages for companies, self-employed workers and workers affected by the coronavirus, but it seems unlikely that it will carry out in this first package of measures. The ones that are almost confirmed are the fiscal measures. Some tax payments may already be deferred. These tax deferrals are granted for a period of six months – the Executive could extend this period tomorrow – but companies will have the option of returning the money within 90 days and not paying anything in interest during this grace period. In addition, SMEs and the self-employed may also request the postponement for concepts that until now were unavoidable, such as withholdings of personal income tax, VAT contributions and fractional payments of corporation tax. In addition, the social agents have requested the automatic tax deferral or fractionation; immediate payment to providers of pending invoices without exhausting the deadlines established by the delinquency law; and the acceleration of pending tax refunds.

The Ministry of Economy is already evaluating the invoice that will entail the implementation of all these measures. Sources close to the government are already talking about a direct impact of more than 100,000 million euros in the public coffers, both due to the reduction in tax revenues and the paralysis of social contributions and the extra expense that will have to be faced. , especially if finally the State assumes part of the economic implications of the regulatory files and opens special lines of financing. To this should be added the exponential increase in social benefits, mainly unemployment benefits, which will grow above the figures reached in the worst years of the crisis, when in 2010 they exceeded 34,000 million euros. Therefore, the 19,020 million that were paid in 2019 will be long exceeded if this crisis continues over time.

The head of Labor, Yolanda Diaz, seems to have finally imposed the criteria that already advanced in the action guide published at the start of the health crisis. In it, it authorized companies that were in need of paralyzing their business activities due to the direct cause of the coronavirus to suppress all payments of Social Security contributions during the total period of closure – now they have also included SMEs and the self-employed. Of course, they must “duly” prove that it is due to “force majeure”, as established in articles 47 and 51 of the Workers’ Statute. This measure, which must be authorized by the Labor Inspectorate, will guarantee that the period released from contribution will count as “effectively contributed by the worker”. In the event of dismissals, “compensation will be borne by the Salary Guarantee Fund (Fogasa)”. Work authorized three formulas to be able to request it: telework with “temporary and exceptional character” until the risk situation passes; Suspend the activity in whole or in part with a temporary employment regulation file, as long as “the productive, technical or organizational cause does not affect all the hours or days of work”; and suspend the activity without processing a regulatory file. In this case, the provisions of article 30 of the Workers’ Statute would apply, so that employees will keep their full salary.

All these measures must be confirmed today in the Council of Ministers to be chaired by the Prime Minister, Pedro Sánchez.

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