Spanish Government extends ERTE until January 31, 2021

The Spanish Government has today (Tuesday, September 29) approved the extension of its furlough scheme, ERTE, until January 31, 2021.

THE Council of Ministers has also extended the moratorium on rents and the suspension of evictions.

The ‘income protection scheme’ was introduced in March after State of Alarm was declared,
and has so far cost the country €24 billion.

It was due to end tomorrow, September 30, but will now run for a further four months ‘to protect the income of families’.

A battery of measures has been approved to ‘generate a scenario of certainty for the next few months and in particular, the Christmas season, which is one of the most important times of the year for the Spanish economy.

The new scenario poses different challenges that the Government will cover with four different types of ERTE to adjust them to the needs of each territory/region and sector.

The first relates to sectors whose activities have been hit hardest by the pandemic – such as the hotel industry and commerce.

These are industries which have been unable to bring back their workforce due to economic issues and as such workers are protected until January 31.

Exemptions will be 85 per cent for companies with less than 50 workers and 75 per cent for those with more staff.

The second ERTE relates to impediment for towns/territories which have been closed by the authorities to contain coronavirus.

Firms with less than 50 employees will have a 100 per cent exemption from business contributions to Social Security, and 90 per cent for those with more than 50 workers, while the restrictions last.

Thirdly, a new ERTE which applies in the cases of ‘activity limitation’, areas in which there is movement or activity restrictions – for example opening hours – of some kind which impedes business but does not necessarily mean closure.

Here exemptions will be scaled down each month, starting at 85 per cent for firms with less than 50 staff and 75 per cent for bigger companies, reducing to 60 and 50 per cent respectively in January.

And finally, there is an ERTE which will protect companies that don’t have any restrictions and are not in any of the sectors protected by force majeure ERTE.

The Government has also created a new unemployment benefit for workers with fixed-discontinuous contracts who usually lose their jobs when the summer season ends, and for seasonal workers who this year, were unable to work due to the coronavirus crisis.

Minister of Labor, Yolanda Díaz, said during the press conference after the Council of Ministers decision, “we are not going to leave anyone behind”.

Meanwhile, the Minister of Social Security, José Luis Escrivá predicted “if we save autmun and winter, we will fully recover”.

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