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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case PT-2020-35/1254 – measures in Portugal

Financial support for the hiring of young unemployed - Incentive ATIVAR.PT

Apoio financeiro à contratação de jovens desempregados/as - Incentivo ATIVAR.PT

Country Portugal , applies nationwide
Time period Open ended, started on 28 August 2020
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Active labour market policies, incl. subsidised job creation
Author Heloisa Perista and Maria da Paz Campos Lima (CESIS) and Eurofound
Case created 06 October 2020 (updated 15 October 2020)

Background information

To face the economic and social impacts of the COVID-19 pandemic, the Government established as one of the priority axes of the Economic and Social Stabilisation Programme (Programa de Estabilização Económica e Social), approved by the Resolution of the Council of Ministers no. 41/2020, of 6 of June, the maintenance of employment and the gradual recovery of economic activity.

The measure ATIVAR.PT Incentive was created in this context. It is framed by a wider package of active labour market policies, the programme ATIVAR.PT - Enhanced Support Programme to Employment and Vocational Training (ATIVAR.PT — Programa Reforçado de Apoios ao Emprego e à Formação Profissional). This Programme aims to ensure an adequate and rapid response with support programmes for hiring and internships, in articulation with programmes for specific sectors and groups. It includes two policy measures: a) ATIVAR.PT Internships; b) ATIVAR.PT Incentive.

The Ordinance 207/2020, of 27 August, regulates the measure ATIVAR.PT Incentive, a support to the hiring of unemployed people oriented to the creation of sustainable employment and to the promotion of the employability of groups more distant from the labour market. This measure introduces reinforced incentives to stimulate the hiring of unemployed persons with low employability, notably young registered unemployed aged 29 years old or less, while providing for a set of transitional mechanisms to respond to the new unemployed and to adapt to the exceptional context that the country is experiencing.

Content of measure

The objectives of the measure ATIVAR.PT Incentive are (article 2):

  1. Prevent and combat unemployment;
  2. Encourage and support net job creation;
  3. Encourage the professional integration of specific groups with higher difficulties in the integration into the labour market;
  4. Promote the improvement and quality of employment, encouraging more stable employment relationships;
  5. Encourage the creation of jobs located in inland areas in order to reduce regional disparities.

The measure ATIVAR.PT Incentive, corresponds to a financial incentive to the employer that concludes an employment contract with an unemployed registered for at least six months at the PES (transitory and until 30 June 2021, this period has been reduced to three months), who match specific conditions, notably those who are aged 29 years old or less (article 6). This mandatory period of registration at the PES is reduced to two months when the unemployed aged 29 years old or less.

The private for profit or not for profit employer must meet the following requirements (article 3):

  • Being regularly constituted and registered;
  • Having completed the legal requirements required for the exercise of the activity or present proof of having started the applicable process;
  • Having the tax and contributory situation regularized;
  • Not being in non-compliance with regard to financial supports granted by IEFP, I. P .;
  • Having the situation regularised regarding funds in the context of the European Social Fund financing;
  • Having organised accounting in accordance with the law;
  • Not having delayed salary payments;
  • Not having been convicted for a criminal or administrative offense due to violation of labour legislation, notably regarding discrimination at work and access to employment, in the last three years, unless the sanction applied in the context of this process results in a longer term.

The granting of financial support requires the maintenance of the job for at least 24 months, in the case of an open-ended contract, or the initial contract duration, in the case of a fixed-term contract (article 9).

The employer is obliged to provide vocational training to the hired worker, in one of the following modalities (article 10, paragraph 1):

  1. Work-related training adjusted to the skills of the job, for a minimum period of 12 months, monitored by a tutor selected by the employer;
  2. Work-related training adjusted to the skills of the job, in a certified training entity, with a minimum workload of 50 hours, carried out, whenever possible, during the normal working hours.

The employer is entitled to financial support corresponding to (article 11):

  1. 12 times the value of the Social Support Index (Indexante dos Apoios Sociais – IAS), in the case of open-ended contract;
  2. 4 times the value of the IAS, in the case of a fixed-term contract. Note: The amount of the IAS in 2020 is €438.81.

This financial support is increased by 30% notably in the case of hiring unemployed persons aged 29 years old or less with an open-ended contract. The financial support is also increased when the job is located in inland areas; and when the person hired belongs to the under-represented sex in that occupation.

The employer that converts, under this Ordinance and respecting specific requirements, a fixed-term contract into an open-ended contract is entitled to a ‘conversion award’. The amount of this award is equal to twice the monthly basic wage defined in the contract, up to the limit of five times the value of the IAS (€2,194.05) (article 12, paragraph 1); transitory, until 30 June 2021, this amount is equal to three times the monthly basic wage defined in the contract, up to the limit of seven times the value of the IAS (€3,071.67).

Use of measure

Not yet estimated.

Target groups

Workers Businesses Citizens
Unemployed
Applies to all businesses Youth (18-25)

Actors and funding

Actors Funding
National government
Company / Companies
Public employment service
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

As stated in the Ordinance regulating the Incentive measure ATIVAR.PT, the social partners represented at the tripartite Standing Committee for Social Concertation were consulted.

Furthermore, this measure will be evaluated by the Standing Committee for Social Concertation within three years from the entry into force of this Ordinance.

Views and reactions

Social partners supported the measure.

Sources

Citation

Eurofound (2020), Financial support for the hiring of young unemployed - Incentive ATIVAR.PT , case PT-2020-35/1254 (measures in Portugal), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.