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Royal Decree Law 5/2001 of 2 March introduced significant changes to hiring incentives (bonificaciones), which are set out in detail in this article.
1.- HIRING INCENTIVES FOR PERMANENT EMPLOYMENT OF CERTAIN UNEMPLOYED GROUPS:
Requirements to qualify for the incentives:
1.- Being up to date with tax obligations and obligations towards Social Security.
2.- Not having been excluded from access to benefits under employment promotion programmes as a result of committing serious infringements that have not yet become time-barred (infringements relating to employment promotion aid, pursuant to Article 46.2 of Law 5/2000 of 4 August on Administrative Offences and Sanctions in the Social Order).
The disqualification sanction from access to these incentives shall have a maximum duration of 1 year.
Exclusions:
1.- Special employment relationships: senior executives; domestic workers; professional sportspersons; performers and bullfighters; persons involved in commercial operations on behalf of one or more employers without assuming the associated commercial risk; persons with disabilities working in special employment centres; port stevedores.
2.- Employment of a spouse, ascendants, descendants or other relatives by blood or affinity up to and including the second degree, of the employer or of those holding managerial positions.
3.- Employment of workers who, within the 24 months prior to the date of hire, had been employed by the same company or group of companies under a permanent contract.
4.- Workers whose permanent employment relationship ended within the 3-month period prior to the end of the contract.
5.- Companies or entities that have terminated subsidised contracts on grounds of unfair dismissal or collective dismissal under this regulation shall be excluded for a period of 12 months from the benefits provided for in this provision.
Schedule of incentives and contribution reductions:
| HIRING EMPLOYER Employers who hire unemployed persons registered with Employment Offices. |
INCENTIVES OR CONTRIBUTION REDUCTIONS |
| Women aged 16 to 45 | 25% for the first 2 years |
| Women aged 45 to 55 | part-time contract: -50% in the first year -45% for the remainder of the contract |
| full-time contract: -60% in the first year -55% for the remainder of the contract |
|
| Women aged 55 to 65 | part-time contract: -55% in the first year -50% for the remainder of the contract |
| full-time contract: -65% in the first year -60% for the remainder of the contract |
|
| Women hired in sectors with a lower rate of female employment | Long-term unemployed women (registered as jobseekers for more than 6 months), or aged over 45: -70% in the first year -60% in the second year |
| Short-term unemployed women (registered as jobseekers for less than 6 months), or aged under 45: -35% for the first 2 years |
|
| Long-term unemployed women (registered as jobseekers for more than 6 months) | Part-time: -20% for the first 2 years |
| Full-time: -30% for the first 2 years |
|
| Unemployed women receiving unemployment benefit or subsidy with more than 1 year of entitlement remaining | Part-time: -55% in the first year -45% in the second year |
| Full-time: -60% in the first year -55% in the second year |
|
| Women receiving the active reintegration income benefit (renta activa de inserción). | Part-time: -65% for the first 2 years. |
| Full-time: -75% for the first 2 years |
|
| Women registered as jobseekers for more than 12 months who are hired within the 24 months following childbirth | 100% in the first year |
| Long-term unemployed men (registered as jobseekers for more than 6 months) | 20% for the first 2 years |
| Men aged 45 to 55 | 50% in the first year 45% for the remainder of the contract |
| Men aged 55 to 65 | 55% in the first year 20% for the remainder of the contract |
| Men receiving unemployment benefit or subsidy with more than 1 year of entitlement remaining | 50% in the first year 45% in the second year |
| Men receiving the active reintegration income benefit (renta activa de reinserción). For men, the incentive rates are the same regardless of whether they are hired on a part-time or full-time basis in all the situations listed above. | 65% for the first 2 years |
| Unemployed persons receiving an agricultural subsidy as employees under the Special Agricultural Scheme | 90% in the first year 85% in the second year |
| These incentives are increased by 5% where the employer is a self-employed employee registered as self-employed before 1 January 2000, who had no salaried employees in the 12 months prior to the hire, and who takes on their first employee on a PERMANENT basis. | |
2.- HIRING INCENTIVES FOR RECRUITING UNEMPLOYED INDIVIDUALS ON PERMANENT AND/OR FIXED-TERM CONTRACTS, APPLICABLE TO ALL TYPES OF COMPANIES AND NON-PROFIT ORGANISATIONS:
| GROUPS HIRED | INCENTIVES |
| Unemployed individuals in situations of social exclusion:
a.- Recipients of the PIRMI (Catalan minimum integration income benefit) b.- Young people aged 18 to 30 from child protection institutions c.- People recovering from drug or alcohol dependency who are undergoing rehabilitation or social reintegration d.- Prison inmates (where they are able to take up employment within the prison facility), individuals on conditional release, and former prisoners e.- Individuals who do not qualify for the benefits described in the previous table because they have exhausted the entitlement period for the incentive, or because they do not meet the municipal registration (empadronamiento) or residency requirement |
All incentives listed in the previous table, based on the sex, age and situation of the employee hired, plus, upon expiry of the subsidised period, an additional 65% reduction for the remainder of the contract term, up to a maximum of 24 months |
3.- INCENTIVES FOR CONVERTING FIXED-TERM TRAINING, RELIEF AND SUBSTITUTION CONTRACTS INTO PERMANENT CONTRACTS:
· 25% reduction for the first 2 years of the new permanent contract.
· Previously, the reduction was 50% for the first 2 years.
4.- INCENTIVES FOR CONVERTING WORK-PLACEMENT AND PART-TIME RELIEF CONTRACTS INTO PERMANENT PART-TIME CONTRACTS:
Maintaining the same working hours as under the previous contract:
· 25% reduction for the first 2 years
· Previously, the reduction was 50% for the first 2 years
5.- CONTRACT TO PROMOTE PERMANENT EMPLOYMENT:
| CONTRACTS | LEGAL FRAMEWORK |
| New permanent contracts entered into from 04/04/2001 onwards with unemployed workers belonging to one of the following groups:
a.- Young people aged 16 to 30 (inclusive). b.- Unemployed women hired to work in professions or occupations with a low rate of female employment. c.- Workers aged 45 or over d.- Unemployed persons who have been registered as jobseekers for at least 6 months. e.- Persons with disabilities |
The legal framework governing the contract and the rights and obligations arising from it shall be subject to the provisions of the law and collective bargaining agreements applicable to open-ended contracts, with the following exceptions:
-Where the contract is terminated on objective grounds and the termination is declared unfair, the amount of compensation referred to in Article 53.5 of the Workers' Statute, by reference to the effects of disciplinary dismissal set out in Article 56 of the Workers' Statute, shall be 33 days' salary per year of service, with periods of less than 1 year prorated by month, up to a maximum of 24 monthly payments. -A company may not enter into an employment promotion contract if, in the 6 months prior to the conclusion of the contract, it has carried out terminations of employment contracts on objective grounds declared unfair by judicial ruling, or has carried out a collective dismissal. In both cases, the restriction shall apply only to filling those positions in the same job category or professional group as those affected by the termination or dismissal, and at the same workplace or workplaces. This restriction shall not apply in the case of collective dismissal where the conclusion of the contracts referred to in this provision has been agreed with employee representatives during the consultation period provided for in Article 51(4) of the Workers' Statute. |
| Conversion of fixed-term contracts into open-ended contracts. This may be carried out with workers who, at the date of conclusion of the new employment promotion contract, were employed by the same company under a fixed-term or temporary contract, including training contracts, entered into before 31 December 2003. | |
| Contracts concluded before the entry into force of Royal Decree-Law 5/2001 shall continue to be governed by the statutory or collectively agreed rules in force at the time they were concluded. | |
