COVID-19 Alarm Status Report

Mar 26, 2020

Following the declaration of the Spanish state of alarm, the Royal Decree 8/2020 of March 17th was approved, introducing extraordinary urgent measures to address both the economic and the social impact of COVID-19. The different actions considered therein are aimed to be adopted by companies and self-employed in order to cope with this extraordinary situation and, basically, to avoid dismissals.

Mechanisms in place:



Temporary Employment Regulation Files seek the directly induced suspension of employment contracts and reduction of working hours due to losses as a consequence of the situation caused by COVID-19, including the state of alarm. They are considered to derive from a case of force majeure, with the resulting consequences stated under art. 47 of the Workers’ Law approved by the Royal Decree 2/2015 of October 23rd.

Following the situations concerned:

  • Suspension or cancellation of activities
  • Temporary closure of establishments with public-facing activities
  • Restrictions on public transport
  • General restrictions on the mobility of people and goods
  • Lack of supplies and serious problems to continue with ordinary activities
  • Urgent and extraordinary situations due to the staff’s infection
  • Preventive confinement measures imposed by health authorities
    • All activities included in the annex of Royal Decree 463/2020 declaring the state of alarm are considered to be concerned by temporary force majeure.


The procedure to be followed:

  • Firstly, the company is required to submit the corresponding application including a report showing a detail of the fall in activity due to COVID-19, and supporting documentation.
  • Then, the company must inform its employees and transmit the aforementioned report, as well as all relevant documentation, to the workers’ representatives, where there are such
  • The Labour Authority shall take their decision within a 5 days’ period from the time of application (optionally, the Labour Authority may also request more information from the Labour Inspection or the Social Security which would take another 5 days)
  • Once the “ERTE” has been approved by the Labour Authority, the measures proposed in the company’s application (temporary suspension of contracts and/or reduced working hours) shall go into action from the date of the event of force majeure.



In these cases, some “specialties” associated with the extraordinary situation are established: the company solicits the suspension of contracts or the reduction of hours for economic, technical, organizational or productive reasons linked to COVID-19. Actually, these “ERTES” are based on business difficulties associated with or derived from COVID-19 complicating the continuity of activities, regulated by normal “ERE” procedures according to article 47.1 of the Workers’ Statute, though with the following “facilities:

  • If there is no legal workers’ representation, the negotiation committee shall be integrated by persons belonging to the most representative trade unions (quite difficult these days) or, failing this, by three employees of the company concerned.
  • In any case, the representation committee must be constituted within a non-renewable term of 5 days.
  • The consultation period between company and workers’ representatives (as described before) must not exceed 7 days
  • If the Labour Authority decides to solicit a report from the Labour Inspection, this must be issued within a 7 days’ period.



  1. In both cases, the measures taken shall be temporary.
  2. Reduced hours can be between 10% and 70%.
  3. If the company is forced to close due to a health alert issued by the authorities, or the state of alarm, or because the majority of its employees have been infected by Coronavirus, there does exist a case of force majeure. This is questionable, however, if the company is not forced to close but takes its own decision to do so due to its economic situation. In any case, it is the Labour Authority who must consider this.
  4. During the term of contract suspension or reduction of hours authorized on the grounds of temporary force majeure associated with COVID-19, the company shall be exempt from paying its social security contributions provided it had less than 50 registered employees at February 29th, 2020. If there were 50 or more registered employees on the date mentioned, the exemption from business contributions to the social security shall be 75%, with the company assuming the remaining 25%.

Any such exemption must be requested before the General Treasury of Social Security.

  1. The company’s exemption has no impact on workers, i.e. the term of the “ERTE” will be listed as effectively quoted for all purposes.
  2. Once the “ERTE” has been approved by the Labour Authority, the employees can receive their unemployment benefit, even without a grace period. Also, the unemployment benefit received as a result of the said measures will not reduce the periods of benefit to which these employees may be entitled in the future.
  3. IMPORTANT: The aforementioned extraordinary measures are linked to the company’s commitment to maintain the employment at least during a six months’ period after resuming the activities.



Article 17 of the Royal Decree 8/2020 of March 17th, introducing extraordinary urgent measures to address both the economic and the social impact of COVID-19, establishes an EXTRAORDINARY BENEFIT DUE TO THE CESSATION OF ACTIVITIES to those freelancers concerned by the declaration of the state of alarm, aiming to offer them temporary protection during this absolutely unintended situation.

The legal wording stresses the temporary and exceptional nature of this benefit, the duration of which will initially be one month from March 14th, 2020; being extended until the last day of the month in which the alarm ends in case it is prolonged.

The following requirements must be met:

  1. Beneficiaries: Self-employed whose activities have been suspended in accordance with the Royal Decree declaring the state of alarm, and self-employed whose billing in the month prior to which the benefit is requested is reduced at least 75% in relation to the average turnover of the previous six months. If the freelancer has not been registered in the “RETA”-system for the minimum of 6 months required to have access to this benefit, the evaluation will be made considering the actual period of activity.
  2. Requirements/considerations:


  • To be registered under the Spanish “RETA”-system for self-employed on the date the state of alarm was announced.
  • To be up to date with payments to the Social Security. If this was not the case on the date of suspension of activities or the fall in income, however, the administration would grant the self-employed another 30 calendar days to correct the situation and pay the contributions pending, thus acquiring full entitlement to protection. There is no grace period to have access to this extraordinary benefit.
  • To have ceased activities or reduced billing at least 75%.
  • It is not necessary to de-register activities (Form 036 or 037) or in “RETA”.
  • If the freelancer has filed an “ERTE”, this document must be attached to the application.
  • The amount to be received is determined by applying 70 per cent of the regulatory base, as set forth under article 339 of the General Social Security Law. If the self-employed has not paid in for the minimum period to have access to this benefit, the allocation will be equivalent to 70 per cent of the minimum base under the “RETA”-system.
  • The duration will be one month, being extended until the last day of the month in which the alarm ends in case it is prolonged and provided the requirements for receiving the benefit are still met.
  • There will be no obligation to contribute during the benefit period.
  • The deadline for soliciting the benefit is one month from its entry into force, i.e. April 14th; should the state of alarm be prolonged, this deadline will be extended accordingly.
  • This benefit is incompatible with any other social security benefit the self-employed has been receiving or might be entitled to.
  • The application must be submitted to the usual Mutual Fund with which the self-employed has covered his professional contingencies.


Considering the exceptional nature of the situation we are going through, the Spanish Government may approve new measures at any time and completely or partially modify the above-mentioned ones.

In any case, please don’t hesitate to contact us should you need further information or explanations.