This regulation foresees measures for changes to facilitate necessary economic adjustments and to protect employment. These measures can be classified in the following blocks: 

  • Cooperatives. 
  • Employee-owned Companies. 
  • Remote work and adapted-reduced workdays. 
  • ERTE. [temporary suspension plan] 
  • Penalties in labour matters. 
  • Self-employed and option for Mutual Insurance Company 


Measure. Temporary flexibility in the use of the Cooperatives Promotion and Education Fund to mitigate the effects of COVID-19. 

Until December 31, 2020 the Cooperative Education and Promotion Fund can be allocated, in whole or in part: 

  1. As a financial resource, to provide liquidity to the cooperative if needed to operate. The amount allocated for this purpose must be returned by the cooperative under the following requirements: 
    • Allocate at least 30% of freely available earnings generated each year,  
    • Over a maximum period of 10 years. 
  2. Any activity helping to stop the COVID-19 health crisis or mitigate its effects, either through its own actions or donations to other entities, public or private.

Employee-owned Companies. 

For employee-owned companies established in 2017, due to the additional difficulties that may arise from this situation, a period of 12 additional months is granted to achieve the requirement that “none of the partners may be the holder of shares or social participations representing more than one third of the share capital”. 

Remote work and adapted-reduced workdays. 

These measures, adopted by Royal Decree-Law 8/2020 of March 18, are extended until 3 months after the end of the State of Alarm is ordered.  

In addition, there may be further extensions from the Government of these provisions. 

Temporary Employment Suspension Plans [ERTE]. 

Until now, companies providing essential services have had limited possibilities for temporary employment adjustment. Including companies that have not been forced to suspend their activities. 

This, which compromised the viability of several companies in these sectors, is modified, establishing that: 

“In relation to the activities that must be maintained in accordance with the State of Alarm declaration, other legal regulations dictated by the delegated authorities under the provisions or article 4 of Royal Decree 463/2020 of March 14, it is understood that force majeure described in the previous paragraph occurs with respect to the suspension of contracts and reductions in working hours applicable to the part of the activity not affected by the aforementioned activity maintenance conditions”. 

Penalties in labour matters. 

The basic sanctioning regulation in this scope is made stricter, Law 5/2000, expressly considering a very serious infringement (sanctions between 6,251 and 187.515 euros) to be declarations or consignments of false or inaccurate data, which determine the fraudulent collection of benefits from the Social Security system. 

It will be considered as an infringement for each worker who improperly accesses these benefits, as a consequence of false or inaccurate data. 

Of equal infringement will be conduct of the company requesting employment-related measures that are not necessary or that do not have sufficient connection to the originating cause, when this circumstance is deduced from falsehoods or inaccuracies in the data given by them, provided that they cause generation or receipt of undue benefits or the application of undue deductions in Social Security contributions.  

Self-employed and option for Mutual Insurance Company. 

Self-employed individuals had until June 2019 to opt for a Mutual Insurance Company collaborating with Social Security to manage certain Social Security benefits.  

Around 50,000 self-employed individuals did not do so and currently need to request for cessation of activity en masse. As such, it is agreed that they can opt for a Mutual Insurance Company when requesting the cessation and thus guarantee that the new entity can recognize the right and facilitate the processing. 

This change will also apply to temporary disability benefits. 

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