Extension of temporary lay-offs (ERTE) in Spain

The extension of temporary lay-offs (ERTE) in Spain is among the measures adopted by the Ministry of Inclusion, Social Security, and Migration for companies and workers. The agreement will enter into force on July 1st and will extend the impact of the protection measures adopted during the state of alert until September 30.

For companies in Spain, this agreement means new exemptions in social contributions.

Companies that have not yet been able to restart their activity and have all their workers suspended

In these cases, a new figure, the transitional ERTE (temporary transition measures), has been created with exemptions from decreasing contributions.

• For companies with less than 50 workers, the exemption will be 70% in July, 60% in August, and 35% in September
• For companies with 50 workers or more, the exemptions in social contributions will be 50%, 40%, and 25% in July, August, and September, respectively.

Companies that have only been able to incorporate part of their staff

In these cases, there is an extension of the formula initiated in mid-May, whereby the company will get a bonus for activated workers rather than for those suspended.

• For companies with less than 50 workers, the exemptions will be 60% for activated workers and 35% for non-activated workers during the months of July, August and September.
• For companies with 50 or more workers, the exonerations will be 40% for activated workers and 25% for those not activated during those months.

What happens with temporary employment regulation procedures based on economic, technical, organizational, and production (ETOP) causes?

In the case of ETOP procedures derived from Covid-19 initiated before and after the entry into force of the Royal Decree-Law, companies will be able to benefit from exemptions to the contribution until September 30 provided that they are immediately consecutive to an ERTE of force majeure.

What happens in the event of a new outbreak?

In the exceptional cases where a company has to close because of a new pandemic outbreak, an exemption from social security contributions is provided:

• In companies with less than 50 employees:
  • 80% for inactive workers
  • 60% for active workers
• In companies with more than 50 employees:
  • 60% for inactive workers
  • 40% for active workers

In all cases, the authorities will have to approve all the files.

For further information regarding temporary lay-offs in Spain,