Your employer filed an ERTE. How does it affect you?

Due to the covid-19 the Spanish government has implemented different measures to adapt to this new situation. One of these is the creation of something named an ERTE. This article explains what this is and if or how it can affect you.

What is an ERTE?

ERTE stands for: record of the regulation of temporary employment (expedientes de regulación temporal de empleo, in Spanish). It’s a temporary suspension of contracts or, in some cases, a reduction in working hours.

Alternatively, there is also the ERE, which stands for: employment regulation files, and is defined as a collective dismissal. It is important to know that ERTEs are temporary but EREs are permanent.

The ERE and ERTE are processes which are regulated by the Labour Inspectorate. This means that if they are executed, they must first be prepared with legal advice.

If your employer has filed an ERTE, what rights do you have?

Under normal circumstances, unemployment benefit was an option as long as you had made contributions for at least 360 days.

This condition has since been lifted. The new rule determines that every employee is eligible to apply for unemployment benefit irrespective of the period worked.

How is my unemployment benefit calculated and how long will it last?

Your unemployment benefit will be estimated according to your Social Security contribution base for the preceding 180 days. You can find this information on your pay slip, which is issued by your employer on a monthly basis, specifically in the box “Base de cotización Seguridad Social“.

Once the base is identified, the worker will be eligible to receive 70% of this amount for the first 180 days, after which it will reduce to 50 % until the end of the ERTE.

The ERTEs that have been approved by force majeure due to the coronavirus will last for the duration of the alarm state.

What is considered force majeure?

The loss of activity as a consequence of covid-19 and the state of alarm, which implies suspension or cancellation of activities, closure of places of public influx, restrictions on transportation and mobility of people or goods, lack of supplies that prevent the activity from continuing, or in urgent and extraordinary situations due to the contagion of the workforce or the adoption of preventive isolation measures.

Do you have to pay Income Tax and Social Security Contributions?

Yes, you must keep contributing to Social Security throughout the period in which you receive unemployment benefit and paying income tax if applicable.

If you want to know how much you will be entitled to, you can use the calculator set up by the Social Security department.

We know this process can be overwhelming but AvaLaw is here to help you clear up any doubts you may have, and find the best solution for your particular case. Please do not hesitate to contact us.

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