1. How do ERTEs directly caused by COVID-19 affect Social Security contributions?
As a general rule, in cases of suspensions of contracts or reductions to working days, companies are obliged to pay their contributions.
Royal Decrees-Law 8/2020, of 17 March, 18/2020, 12 May, and 24/2020, 26 June, exceptionally provide that in ERTEs authorised based on temporary force majeure linked to COVID-19, as well in employment adjustment plans for economic, technical, organisational or production causes (ETOPs), the company shall be exempt from paying the business contribution, including contribution for unemployment, Wage Guarantee Fund and Vocational Training, with the percentages and terms provided for in the above mentioned regulation.
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.
Exemption rates will vary depending on whether the company, as of 29 February 2020, had 50 or less, or more, employees registered in the Social Security.