Economic measures due to COVID-19. On 16 March, Prime Minister Pedro Sánchez announced a series of economic measures aimed at alleviating the economic and social effects of the COVID-19 pandemic and the state of alarm declared as a result of it.
As has become customary in this country, the reality as stated in the Official State Gazette (the small print) differs significantly from what was announced in the media.
We shall therefore proceed to analyse the measures contained in Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to address the economic and social impact of COVID-19 (RDL). For the sake of brevity, we will limit ourselves to the labour and/or tax measures that are relevant to our clients. The RDL includes other measures (protection of vulnerable groups, aid for scientific research, …).
Medidas económicas por COVID-19 en el ámbito financiero
In the financial area, new resources will be provided to the ACELERA PYME programme of the public company RED.ES. A line of guarantees of up to €100 billion will also be approved for the renewal of loans and new financing. The Official Credit Institute (ICO) will be able to increase its borrowing capacity by 10 billion euros. Note the verb tense used in these measures: simple future.
Extra benefit, self-employed
The self-employed will be able to access a new extraordinary benefit for cessation of activity to cover the termination of activity for involuntary reasons (art. 17).
This benefit will be valid for one month or, if the state of alarm is extended for more than one month, until the last day of the month in which the state of alarm ends.
- The activity is suspended or turnover is reduced by at least 75 percent in relation to the average turnover of the previous six-month period.
- Be affiliated and registered with the RETA before 14 March.
- Be up to date with the payment of social security contributions.
Also as economic measures by COVID-19, employment regulation proceedings (ERE, ERTE) receive special attention in order to simplify procedures and requirements (art. 22 et seq.), in particular:
The loss of activity resulting from COVID-19 will be considered force majeure for the purposes of suspension of contracts or reduction of working hours. It should be borne in mind that not all losses of activity count, only those defined in Article 22.1 of the RDL itself.
The regulation procedures for economic, technical, organisational or production reasons are more similar to those for force majeure.
Specifically, when the necessary conditions are met (Article 22, ap 1):
- The company shall submit an application, accompanied by a report on the linkage of the loss of activity as a result of COVID-19 with the relevant annexes.
- The company shall communicate the application to the workers and their representatives, providing them with a copy of the report.
- Force majeure shall be established by the labour authority.
- The labour authority will have five days from the date of the request to establish the existence of force majeure.
In the absence of force majeure:
- The consultation period shall not exceed 7 days,
- The report of the Labour Inspectorate shall be issued within seven days.
Companies will be exempt from the employer’s contribution to Social Security provided that: they have fewer than 50 workers (as of 29 February 2020) and undertake to maintain employment for 6 months. This exemption will only be applicable to the cases included in the previous procedure (that of article 22).
The exemption will be applicable at the request of the employer.
The above will not apply to procedures initiated before the entry into force of the RDL (dt. 1ª), but the following will apply.
Workers will be able to access unemployment benefit without this counting towards the maximum periods of receipt and, furthermore, those who lack the necessary contribution period will have access to it (art. 25). It also regulates the extemporaneous presentation of applications for unemployment benefits (art. 26).
Economic measures due to COVID-19 in the tax field
In tax matters, a special and more specific area is defined with regard to the application in this area of the additional provisions of the decree declaring the state of alarm.
At the same time, the deadlines for the payment of tax debts are made more flexible, whether in the voluntary or enforced period, and even payments derived from deferment and/or instalment agreements. Specifically, the payment deadline is extended:
- If the deadline has already expired on 17 March, until 30 April 2020.
- Otherwise, until 20 May 2020 (or the deadline of the general rule, whichever is longer).
Telecommuting, teleworking, adaptation of working time
In the family sphere, workers may request a reduction in working hours (with the consequent proportional reduction in salary) after accrediting duties of care for dependent persons (with respect to the spouse, common-law partner and relatives by blood up to the second degree). Specifically, they will be able to do so (art. 6):
- Those who must assume the care work carried out by another person who can no longer do it for justified reasons related to COVID-19 (ie, their caregiver cannot come).
- When the educational (or other) centre that provided care or attention to the person in need of care is closed.
- When the presence of the worker is necessary due to age, illness or disability of the person in need.
Access to this individual right must be based on a responsible sharing of care duties. The right extends to any aspect of working conditions: change of shift, change of working hours, flexible working hours, change of workplace, etc. (Art. 6, 2nd paragraph).
Absence from work is made more flexible according to the circumstances by providing for the possibility of teleworking, as well as a preference for adapting the working day for care purposes.
It should be jeld in mind that remote working conditions must be assessed in the company’s occupational risk prevention plan. Exceptionally, this assessment can therefore be carried out voluntarily by the workers themselves by means of a self-assessment (Art. 5).
As we have already mentioned, there are differences between what has been announced and trumpeted in the media and what has been published in the BOE (Official State Gazette). In particular we should mention:
- In Catalonia, nothing has been published (officially) yet about a possible €2,000 aid for self-employed workers.
- There are no particular measures regarding the payment of the self-employed quota (RETA).
For the sake of brevity, we have omitted to describe several measures contained in the RDL, but we believe it is worth mentioning:
- Moratorium for vulnerable mortgagors, Articles 7 et seq.
- The deadline for the return of products is interrupted (Art. 21).
- Number portability is suspended (art. 20).
- In the commercial sphere, the deadlines for applying for insolvency proceedings (Art. 43) of creditors and for the formulation and approval of annual accounts are extended, and companies are allowed to hold general meetings of shareholders by videoconference (Art. 40), even if this is not provided for in their articles of association.
- The DNI “shall not expire” and the digital certificate incorporated therein may be used (da. 4ª).
The small print
The RDL includes an additional provision (the sixth) of significant importance: the application of the measures contained in the RDL requires the maintenance of employment during the 6 months following the resumption of activity. The provision is extremely ambiguous and therefore dangerous. Failure to comply with it could lead, a priori, to the obligation to pay social security contributions that are extraordinarily exempt (25%).
The situation is in flux. Measures are constantly being announced and some are even formally approved (others are disallowed or simply disappear).
We therefore recommend that you contact us to define a course of action that can ensure the survival of your company. Our staff have full voice, mail and/or video communications capability and are at your disposal.