Company temporary layoff support to depend on turnover

The support to companies that resort to temporary layoff in Portugal that resume activity will be differentiated according to their turnover and those who need it most, the minister of labour said.

To ensure the recovery of wages, that support reaches those who need it most in getting back to work, the support for maintaining employment created because of the Covid-19 pandemic will be greater depending on the drop in turnover, Ana Mendes Godinho, said at the end of the meeting of Social Concertation on Tuesday, in which partners discussed the Economic and Social Stabilisation Plan (PEES).

The current rules will be maintained for companies closed by legal order or for sanitary reasons, i.e., two-thirds of the wages, supported 70% by the Social Security and in 30% by the employer.

She said that the support that will be given in the current phase of the resumption of activity is transversal to all sectors and is focused on supporting the resumption of activity and not a suspension.

According to Godinho, the actual value was not discussed in the meeting with the social partners, but it was assumed, as a principle, to respond to wages progressively according to the next months.

She stressed that the temporary layoff aims to help companies maintain jobs, pointing out that in May, the number of new people enrolled in employment centres was the lowest in the last three months.

She said that the simplified layoff is a very effective measure to maintain jobs, adding that the support has so far covered 804,000 workers.

Asked how long the support from the Institute of Employment and Vocational Training will be available for the normalisation of company activity, corresponding to 635 euros per worker, Godinho said that it will be operational from the moment the temporary layoff ends.

The simplified layoff (suspension of the contract or reduction of working hours with the loss of wages) ends on 30 June, but the government has already acknowledged a similar new measure, adapted to the current phase of lockdown easing, in which most of the economic activities have been resumed.

Costa said that the measure cannot be a perverse incentive for companies to remain inactive but must be a stimulus for them to open their doors and participate in the effort to relaunch the economy.

The weekly newspaper Expresso reported on Saturday that among the scenarios being studied by the government is one that foresees the payment of 100% of the wages of the lowest-paid workers.

Under the study, according to the newspaper, is the end of the exemption from social security contributions for companies – which is currently granted to those who have used the simplified layoff – namely for larger companies.