Since the labor reform was launched, the Government has been trying by all means to increase permanent contracts. The goal was end the temporality to provide workers with “stability in employment”. Until now, Trabajo encouraged the conversion of temporary contracts into indefinite ones with financial aid to companies. But a new royal decree law wants to put an end to that.
The Government wants permanent contracts to be made from the beginning. And to achieve it, he will implement bonuses to companies that carry it out. Of course, they will be obliged to maintain the worker for at least three years. Let’s see how these aids will be.
the new system. For years, companies have received incentives for hiring. These public aids are made available by the Government to companies to promote employment. However, in its crusade to end temporary employment, the Ministry of Labor has decided to modify this aid system to exclusively benefit those who hire indefinitely. “The entire system accommodates itself to a single reality of incentives to achieve job stability. Simply, we stop rewarding temporary hiring ”, the Ministry has indicated.
What does it mean? That the aid will be destined mainly only full days. According to the decree: “Part-time shifts of less than 50% of the full-time shift of a worker are not encouraged, except in cases of conciliation permits.” Therefore, the bonuses will disappear or be drastically reduced when the contract is temporary or partial.
the fine print. As we mentioned before, those companies that collect the aid will be obliged to maintain the employee’s contract for at least three years. On the other hand, the government wants to make sure that the companies that collect the bonuses leave the country. Therefore, if the company decides to transfer its industrial, productive or business activity to a territory outside the EU to reduce costs, it must return all the aid and bonuses received during the four years prior to the relocation, as well as the subsidies received.
How much is the help? As the new decree points out, the main beneficiaries will be the companies that make indefinite contracts to vulnerable groups that have a more difficult time accessing the labor market. For example, signing a permanent contract with low-skilled young people signed up for the National Youth Guarantee System will entitle the company to help in its social contributions of 275 euros for three years.
In addition, whoever hires long-term unemployed people or people over 45 years of age will receive an incentive of 110 euros per month in the case of men and 128 euros per month in the case of women. The same is true for interns, who will receive a bonus of 138 euros per month for three years for the company. The indefinite contracting of people in social exclusion will go from 55 euros per month to 128.
The discontinuous fixed problem. The Government wants to put an end to the bad image that the rest of the Eurogroup has of us in terms of high temporary rates. As we previously told in MagnetAlthough temporary employment has fallen to historic lows, one of the weaknesses of the reform is becoming evident: the duration of the new contracts It has plummeted to its lowest in 15 years. The majority of new signatures cease after a month and the average for all contracts is 45 days. In other words, although the contracts are of “higher quality”, they are also of shorter duration. Contracts grow, yes. But workers also dedicate fewer hours to their activity than before.
Added to all this is another problem: the increase in discontinuous fixed. An effective solution to end temporality but also carries a certain precariousness. Although they are considered indefinite because they do not have an end date, in reality they are not. In practice, workers carry out a seasonal activity for a few months and they are out of work the rest of the year. Suffice it to say that so far this year 2.2 million of these contracts have been signed, 53% for those under 34 years of age, according to Social Security.
What is the Government going to do? As a result of the repeated criticisms of other parties and of the unions that the figures are being made up with these discontinuous permanent workers, the Ministry of Labor has indicated that will break down and analyze this type of contracting. To do this, it has asked the technical teams to start the tasks to be able to disaggregate all the information on employees with a permanent discontinuous contract, so that it can be broken down which are active and which are not. It is the first time that a government publishes this information.
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