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We continue our overview of the key features of current employment contracts, with the aim of providing useful guidance when deciding which contract type best suits the specific needs of each situation.
Written by Josep Conesa
Employment and insolvency lawyer
2. Subsidised permanent contract for jobseekers registered for six months or more
| CONTRACT TYPE | PERMANENT employment contract FOR JOBSEEKERS CONTINUOUSLY REGISTERED AS UNEMPLOYED FOR SIX MONTHS OR MORE |
| EMPLOYEE ELIGIBILITY REQUIREMENTS | · Must be unemployed and registered continuously with the Public Employment Service for at least six months. · The employee must not be related by blood or marriage up to and including the second degree to the employer, or to anyone holding a management position or sitting on the governing bodies of the company, nor to the persons being hired in those capacities. This exclusion does not apply where the employer is a self-employed worker with no employees and is hiring a single family member under the age of 45 who neither lives in the same household nor is financially dependent on them. · The employee must not have been linked to the company, group of companies, or entity during the 24 months prior to hiring under a permanent contract, or during the preceding 6 months under a fixed-term or temporary contract, or under a training, relief, or retirement-substitution contract. · In the case of worker-members or working members joining cooperatives or worker-owned companies, subsidies will not apply where the individual had a prior contractual relationship with such entities lasting more than twelve months. · Workers who have ended a permanent employment relationship within three months prior to the new contract being formalised are excluded. This exclusion does not apply where the contract ended by dismissal declared or acknowledged as unfair, or by collective dismissal, except in the case provided for in Article 8.2 of Royal Decree Law 5/2006 of 9 June (BOE of 14 June). |
| EMPLOYER ELIGIBILITY REQUIREMENTS | · All companies may enter into this type of contract, including cooperatives and worker-owned companies that take on members of this group as worker-members or working members, provided the entity has opted for a Social Security scheme for employed workers, as well as self-employed workers who hire individuals from this group. · Must be up to date with all tax obligations and obligations towards Social Security. · Must not have been barred from accessing benefits under employment programmes, as provided for in Article 46 of Royal Legislative Decree 5/2000 of 4 August (BOE of 8 August), approving the Consolidated Text of the Law on Offences and Sanctions in the Social Order. · Companies that have terminated or terminate subsidised contracts by reason of dismissal declared unfair or by collective dismissal will be excluded for a period of 12 months from the incentives provided under Royal Decree Law 5/2006 of 9 June, Article 6.2 (BOE of 14 June). |
| FORM AND DURATION | · Permanent contracts, including permanent seasonal contracts, that qualify for these incentives may be entered into on a full-time or part-time basis and must be formalised in writing using the standard form made available by the State Public Employment Service. · The contract must be notified to the Public Employment Service within ten days of being signed. |
| INCENTIVES | · Each permanent contract entitles the employer to a reduction in employer Social Security contributions of €50 per month (€600 per year) for 4 years. |
| OTHER FEATURES |
· The benefits provided may not, when combined with other public aid granted for the same purpose, exceed 60% of the annual salary cost associated with the subsidised contract. · Where subsidies are obtained without meeting the required conditions, the amounts unpaid by way of Social Security contribution reductions must be repaid, together with the applicable surcharges and late-payment interest, in accordance with the rules governing Social Security debt collection. · The incentives described will not be granted in respect of special employment relationships. · This contract type may benefit from the reduced dismissal compensation of 33 days' salary per year of service, up to a maximum of 24 monthly payments, as established in the First Additional Provision of Law 12/2001 of 9 July (BOE of 10 July), provided all applicable conditions are met and none of the exclusion grounds set out in that provision apply. |
