The government Adopts New Measures To Maintain And Encourage Employment

30 April 2009

The new measures ordered by the Executive branch are included in Royal Decree law 2/2009 dated March 6, as urgent measures to maintain and promote employment and the protection of the unemployed.

I would like to focus on two measures included in the package; the first safeguarding employment and the second promoting of same.

First of all, the executive branch has established a 50% discount on the company Social Security contributions for those companies which find themselves suspending employment contract or temporarily reducing work shifts as authorized by employment regulation files. To that end the business owner must undertake to keep the workers affected by the employment regulation procedure on for at least one year following the end of the suspension or the work shift reductions. Otherwise, the business owner must pay the discounted amount in full. Any disciplinary dismissals which take place before the end of the year are exempt (dismissals on fair grounds).

Secondly, the executive branch has proposed, with the aim of promoting employment for out-of-work individuals, a 100% discount on the company Social Security contribution for common contingencies for those business owners who hire workers who are currently receiving unemployment benefits. Said discount remains in force until it amounts to the sum equalling the gross amount of the remaining benefits to be paid to the employee as of the hiring date with a maximum discount of three years. Lastly, it is worth mentioning that in the event that the contract is for part time, the amount of the discount would be reduced in proportion with the proposed work shift.

For further information, please contact Javier Echeburúa Martinez :