New subsidy for workers in sectors affected by economic slowdown

New subsidy for workers in sectors affected by economic slowdown

Due to the increase in COVID-19 infections, the Executive Branch adopted new measures last March that have affected certain sectors of activity very specifically, with limitations or even cessation of these activities in some cases. It is in this context and taking into account that certain workers were excluded from unemployment insurance for not meeting the required criteria, that the Ministry of Labor has decided to establish a special subsidy with a more 'flexible' access.

New subsidy for workers in sectors affected by economic slowdown

Below, we share the main aspects of this new unemployment subsidy due to lack of work, information of special interest for companies in the following sectors: hotels, restaurants, bars, school transportation, education, travel agencies, duty-free shops, public shows, cinemas, catering companies, gyms, and sports clubs.

To be eligible for this special flexible regime, the following is required:

- For workers with monthly pay: to have worked at least 1 month on the Work Control Sheet between 11/1/20 and 3/31/21.
- For day laborers: to have worked at least 25 days in the last 12 months and at least one of them between 11/1 and 3/31/21.

Multiple employment:

Workers in education and sports entities who receive other income from a self-employed or paid activity (whether public or private) not covered by 'common' unemployment benefits are included in this provision, whether they are monthly or day laborers, with fixed or variable pay.

Amount of the subsidy:

- Day laborers will receive 50% of the current or average nominal pay from previous months, as applicable.
- Day laborers will receive the equivalent of 12 daily wages.

Only the pay corresponding to the activity or activities that qualify for this subsidy will be considered (in cases of multiple employment).

Subjective scope of application:

To dispel any doubts and without prejudice to our Firm being available to provide the corresponding advice to companies and organizations on all aspects related to this type of subsidy, we note that the following activity Groups are expressly included (according to Wage Council classifications):

- Group 1 Artisanal catering
- Group 10 Music Houses, Photography Houses, and Duty-Free Shops
- Group 12 Hotels, bars, and restaurants (in general all subgroups)
- Group 13 Land passenger transport-school, remises, Montevideo and interior taxi drivers, radio operator desks, foreign aviation companies, airline pilots, Airport concessionaire companies, private passenger transport for third parties by car (not included in other subgroups).
- Group 16 Education Services (Kindergartens and nurseries, Preschool, primary, secondary, and higher education, Commercial technical, Driving academies, and Non-formal education).
- Group 18 Cultural, recreational, and communication services (Cinemas, Content producers, audiovisual, artists, and independent non-advertising related activities).
- Group 19 Travel agencies, Rental, service, and support for filming equipment, and audiovisual services for events.
- Group 20 Sports entities.

Implementation and validity:

Regarding its operation, as of the publication date of this document, the BPS systems do not yet contemplate this regime. But it is expected that in the coming days the BPS will notify when applications can be submitted and how the process will be carried out through the web.
This special subsidy will be valid from April 1, 2021, until September 30, 2021 (initially and subject to future extensions).

Montevideo, April 22, 2021.

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About la autora

LAWYER - PARTNER

Dr. Mariana Casella

Doctor in Law and Social Sciences, graduated from the University of the Republic. Her professional practice and training is focused on Labor Law, with a postgraduate degree in Labor Law (University of Montevideo). Since joining the firm in 2013 "Castellán Legal | Fiscal | Contable" she has led the Labor Department, becoming a partner in 2016.

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