The COVID-19 coronavirus pandemic has not only caused a global health crisis, but is also seriously affecting the economic activity of many companies. For this reason, the Government of Spain has implemented a series of measures to alleviate the impact on the business sector.
In this context,
is a very useful tool for companies to cope with the current complex situation, without having to resort to mass layoffs of their workers.
What does coronavirus ERD mean? Is it the same as a normal ERTE?
the ERTE or Temporary Employment Regulation Records are a mechanism provided for by law, which companies of any size can benefit from at times when they are experiencing problems of a financial, organizational, technical, production nature, or, as in this case, by situations of force majeure.
In this case, employment contracts may be temporarily suspended or workday reduced by staff.
In RSEs motivated by the coronavirus crisis, companiesmay claim that they take this action for reasons of force majeure. Falling sales, lack of material, or high absenteeism due to government measures are some of the reasons for justifying this temporary ERTE.
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Main benefits of implementing a COVID-19 ERTE
In addition to the speed with which it can be implemented, at a time when the level of income is plummeting; eligible for aRTE because of the Coronavirus crisis can have a number of advantages:
1. Reducing wage spending
The main utility for the employer is the cost savings that workers entail, during the period of uncertainty.
In the case of a reduction in working hours, the salary decreases in proportion to the reduction of hours worked.
If the Coronavirus ERTE contemplates a suspension, the unworked days will be deducted, and no extra payments or vacations will accrue.
2. Suspension of Payments to Social Security
The measure also provides that companies are exempt from payment to the Social Security contribution of their workers for the duration of the State of Alarm in which we find ourselves.
However, there are certain nuances: the State will take over 100% of the quotas in organizations of less than 50 employees, while those with 50 or more workers will have to cover 75%.
3. Avoid dispersion of the template
ERTE workers may apply for unemployment benefit, even if they donot have the minimum quoted; without the right to seek compensation.
This measure is temporary, and therefore, once the coronavirus crisis has been overcome, workers will be able to return to their jobs normally.
This helps prevent a well-seated workforce with valuable workers from wanting to look for another job at the end of this juncture.
ERTE what requirements should companies meet?
While the formalities have been streamlined, there are still a number of steps that the company must take before the Working Ministry of each Autonomous Community.
> Analyzing the causes that justify ERTE
For labour authorities to authorize THED by force majeure,it is necessary to be very clear about the arguments that justify it. It is necessary to prove to the official bodies that there is NO possibility of teleworking or that this modality does not meet the production needs of the company.
If you have questions about these types of measures, you can contact our experts in labor and legal advice,so that they can guide you through the process.
> Fulfilling the company’s obligations to workers
Before taking action, both workers and trade union representatives should be notified of the ERTE’s decision if any.
It is also necessary to provide promptly the data of the employees affected by this measure, so that the competent authorities can process the payment of their service telematically.
Finally, companies that take up the ERTE by coronavirus should be able to dismiss the worker who has been affected by the measure within the first 6 months after the resumption of the company’s activity.
> Submit the required documentation
In order to qualify for the CORONAvirus ERTE, you must make and report to the labor authorities of your autonomous community. This document should include information about your business and the reasons why it is requested.
You’ll also need to provide certificates that prove business closure or production shutdown.
> Wait for the resolution of the request
Following coronavirus submission of ERTE forms, applications continue on their way to the competent authority. In this case, you should wait for a decision, which should take no more than 5 days (as insured from the official bodies).
Under normal circumstances, a failure to respond within the prescribed time limit would be understood as an affirmative answer. However, given the large number of requests expected, this period could be extended.
How long can this CORONAvirus ER be prolonged?
The maximum duration of this measure is not stipulated by law. Sometimes normally the time extension of the ERTE is agreed during negotiation with workers or their trade union representatives, or with the Employment Counseling. However, given the extraordinaryness of the current situation, everything indicates that the suspensions will extend until the brunt of the pandemic passes.
As a positive aspect, companies can take advantage of this period to accelerate the implementation of telework or carry out the digital transformation of thecompany, two measures that will undoubtedly help to return to the path of growth when everything returns to normal.
If you have any questions or need any clarification on the actions regarding the Employment Regulation Records (ERTE), as a result of the coronavirus; you can contact
of our advisors so we can help you.