ECONOMIC MEASURES PUT IN PLACE BY THE GOVERNMENT IN RESPONSE TO COVID-19

Update

17/03/2020: Social security: temporary exemption from payment of contributions by the employer, this measure also applies to self-employed workers.

We're going through a period that's going to take its toll on businesses in Portugal and the rest of Europe. Every government is deploying economic measures to keep their companies afloat, with the obvious aim of avoiding an economic crisis linked to covid-19.

Portugal is no exception to this rule, and Antonio Costa's Socialist government has just introduced 3 economic measures, which we describe below.

Economic measures against forced downsizing

Employees with children under the age of 12

Since Monday, all schools in the country (private and public) have been closed for a minimum of 15 days. As a business owner, you must allow your employees to stay at home if they have children aged 12 or under. To offset the economic loss for both employer and employee, the state will pay 66 % of the basic salary through the social security system, and you, the employer, will pay the remaining 34 %. This measure is valid for the time being 14 daysOf course, this measure will evolve according to the situation.

Please note, however, that if your employee's spouse is already taking advantage of this measure, or if he or she is unemployed, it is not possible for your employee to benefit from this measure.

Putting your employees on holiday

Given the emergency situation, you have the option of forcing your employees to take time off during this period of crisis.

Self-employed contractor

If you are auto-entrepreneur and your situation means you can't work and, by definition, can't generate sales, social security will pay you 30 % of your sales. The calculation is based on your last 3 months of activity.

Next phase

It's true that we're not there yet, but it's important to think and plan ahead before putting your business at risk.

4 measures are being studied, but nothing has been decided yet.

1. The possibility of unpaid leave
2. Possibility of terminating the contract in agreement with your employee
3. You send your employees on a training course promoted by IEFP, which will cover 50% of the basic salary.
4. Simplified redundancy procedure
   

With regard to the last point, the government is working on the creation of an extraordinary simplified "lay-off" procedure, which would enable the temporary suspension of employment contracts by companies whose activity is affected by the covid-19 pandemic.

We'll be putting day this article as soon as possible.