1. How do ERTEs directly caused by COVID-19 affect Social Security contributions, including the declaration of the state of alarm?
As a general rule, in cases of suspensions of contracts or reductions to working days, companies are obliged to pay their contributions.
Royal Decree-Law 8/2020 establishes, as an exception, that for ERTEs authorised on the basis of temporary force majeure linked to COVID-19, companies with fewer than 50 employees registered with the social security authorities on 29 February 2020 are exempt from paying the employer’s contribution, including unemployment contributions, to the Wage Guarantee Fund and vocational training.
In the case that working hours are reduced, companies are obliged to pay their own and the employee's contributions for the part of the working day in which the activity is carried out, and they are exempt from paying the contributions for the part of the working day not carried out.
If the company, on 29 February 2020, had 50 or more workers registered with Social Security, the exemption from contributions shall be 75 percent of the company contribution corresponding to the period of suspension or reduction of working hours.