The Council of Ministers approved last July 4th the Royal Decree-Law 8/2014 on growth, competitiveness and efficiency.
Among the many measures, aimed at fostering the efficient operation of markets, improvements in financing and employability, at PBS we want to highlight the ones affecting payroll.
National Youth Guarantee System
The purpose of the National Youth Guarantee System (NYGS) is to guarantee that all young people over 16 and under 25 ( 30 in case of a disability over 33%) who are not in employment or education, receive an offer of employment, education, apprenticeship or work placement after they complete their formal education.
The beneficiaries of this law are companies and self-employed workers that hire, from July 5th 2014 until June 30th 2016, with a permanent contract someone registered under the NYGS, which requires the following:
- Having the Spanish citizenship, or from any country from the European Union, the European Economic Area, Switzerland, or having permission to reside in Spain that allows to work.
- Be registered in the municipality.
- Must not have worked in the previous 30 calendar days.
- Must not have been enrolled in education activities which entail more than 40 hours per month in the 90 days preceding the application.
- Must not have been enrolled in education activities which entail more than 30 hours per month in the 30 days preceding the application.
- Have an interest in participating with the National Youth Guarantee System
A tax break of up to 300€ over six months is established for the permanent full time employment of those people benefiting from the Youth Guarantee. On the other hand, a part time employment will have a tax break of 225 € per month if it corresponds to the 75% of a full time or more, and 150€ per month if it corresponds to the 50% to 74%. This incentive will remain in force until 30 June 2016.
The new worker must stay in the company for at least 6 months. In the event of non compliance the company shall give rise to the repayment of the discounts of the effected contracts.
The new contract must contribute to increase the number of permanent contracts and total employment level within the company and it must be maintained during the whole tax incentive period.
It is compatible with any other permanent employment incentives already in place as long as the monthly amount to contribute to the social security by the company is not negative.
If carried out untill June 30th 2016 with young people under 30, even if they finished their education five years ago, who are under the NYGS, the discount of the business payment to Social Security for common contingencies will be 100%.
Educational part time contracts
If carried out with unemployed young people under 30 years old and beneficiary of the NYGS, the discount of the business payment to Social Security for common contingencies will be 100% for companies with less than 250 employees and 75% for the rest, up to a maximum of twelve months.
These include the compulsory internships in order to obtain a university degree or professional education. Should there be any retribution, the incentives will amount to 100% starting august 1st 2014. This way, they promote the incorporation of students to the job market while at the same time the coverage of their social rights is granted.
Images: La Moncloa