Tuesday, 28 April 2015

Government steps up measures to support independent contractors and social economy


The Council of Ministers submitted the Draft Bill to foster and promote self-employment and the social economy to the Economic and Social Council, a regulation which the Vice-President of the Government, Soraya Sáenz de Santamaría, framed within what "remains the government's priority objective": increasing job creation and improving job quality.

The Minister for Employment and Social Security, Fátima Báñez, pointed out that the bill has received the consensus of associations of independent contractors and of the social economy and that the government has included these groups since the outset "in its road map" as "leading players in exiting the crisis and the start of economic recovery". According to the minister, initiatives such as the Entrepreneur Act and the Supplier Payment Plan have enabled the situation in this area to be turned around: there are almost 60,000 more independent contractors than at the start of the legislature and the number that offer employment has grown by 12.5%.

The aim of the draft bill is to systematise all incentives for self-employment, extend them to new age brackets and groups, and to strengthen second-chance and protective mechanisms, particularly for economically-dependent independent contractors. "This raft of incentives to both independent entrepreneurship and to the social economy could facilitate the creation of up to 550,000 jobs in Spain, which will enable the figure of 3.6 million contributors to the Special Regime for the Self-Employed to be reached", stressed Fátima Báñez.

Flat rate and unemployment benefits

Among the measures contained in the text, the Minister for Employment highlighted those relating to the flat-rate NI contribution: the amount of the quota will be set at 50 euros for new independent contractors for the first six months of NI affiliation, and this reduction will be maintained for those who, after starting their activity, hire other workers within their company. Furthermore, those cases of 'Special Protection under the Flat-Rate' will be extended to victims of terrorism and gender-based violence and to persons with disabilities, regardless of their age.


The Minister for Employment also specified the new aspects relating to unemployment benefits. The possibility of capitalising the benefit in a one-off payment is extended to all age brackets, added to which a part can also be capitalised as a contribution to the share capital of any type of newly-created trading company. All independent contractors will be able to capitalise their unemployment benefit by registering in the Regime of Independent Contractors for a maximum period of nine months, which until now had been restricted to those under the age of 30.

As regards the 'second chance', Fátima Báñez underlined that the term for resuming receipt of unemployment benefits will be extended to 60 months. "The number of companies that disappear within the first five years of activity stands at around 50%, the same as for independent contractors that initiate entrepreneurial activity. Hence, it seems appropriate to us to allow an individual that does not exhaust all their unemployment benefit to recover this at the end of said period", she explained.

The draft bill also extends the incentive for the registration as a contributor of new family members for up to 24 months and introduces the possibility of economically-dependent contractors - those who receive at least 75% of the income from a single client - to hire them in the event of a need to reconcile professional and family life.
Driving the social economy

The measures in favour of cooperatives, worker-owned companies, special employment centres and placement companies constitute another key aspect of the new legislation. On the one hand, an 800-euro discount per annum for three years is established to facilitate the incorporation of new partners in cooperatives and worker-owned companies. On the other hand, incentives for placement companies are maintained when they hire people in situations of risk or social exclusion, and existing discounts are extended to ordinary trading companies that hire workers from these placement companies.

Fátima Báñez pointed out that cooperatives and worker-owned companies employ more than 335,000 people in Spain, while special employment centres and placement companies employ more than 75,000. She added that the number of jobs shed in this sector during the crisis was six points lower than the average for the economy.

Regulation of Worker-Owned and Participated Companies

government also analysed the Draft Bill on Worker-Owned and Participated Companies. The new legislation, which updates the previous law dating back to 1997, clarifies and simplifies the requirements for the incorporation of worker-owned companies, facilitates the incorporation of working partners, adapts to the Market Unity Act and incorporates the principles of good governance and social responsibility.

The Minister for Employment and Social Security underlined that for the first time, the reform includes the definition of companies in which workers participate, which was not previously recognised in Spain, in contrast to many other countries in the European Union.

Also on the issue of employment, the Council of Ministers approved the Spanish Strategy on Health and Safety at Work 2015-2020. According to Soraya Sáenz de Santamaría, this is "one more step towards workplace safety, along the lines of the agreement between the President of the Government and social stakeholders". The strategy, with a provision of 36 million euros, constitutes the main governmental tool for stepping up public policies on occupational risk prevention.

Compliance with deficit and debt targets

The government analysed the Report on the degree of compliance with the stability, debt and expenditure targets of the public administration services in 2014. The Vice-President of the Government pointed out that the economy grew by 1.4% last year, two-tenths of one point higher than forecast, with a noteworthy contribution from internal demand, and that Spain met the deficit target set by the European Union (after the latest adjustments, the figure stands at 5.68% of GDP).

As regards expenditure and debt, Soraya Sáenz de Santamaría pointed out that both regional governments and local authorities reduced their eligible spending, and that the State would have "comfortably" complied with its target had it not been for the ruling of the Court of Justice of the European Union that forced it to return the revenue from the so-called 'healthcare cent'.

The public debt of the public administration services as a whole amounted to 97.7% of GDP, 1.8 points below the limit set.

Other agreements

Draft Law on International Legal Cooperation on civil matters. The law updates international legal cooperation mechanisms and strengthens effective legal protection by guaranteeing this regardless of the greater or lesser degree of collaboration by other states.
Draft Law on re-use of public sector information. The aim of this initiative, which forms part of the reform of the public administration services, is to facilitate the use of documents in the power of the public authorities and other public bodies by individuals.
Draft Bill on the Restitution of Cultural Assets. The future law will affect all those assets that have left Spanish territory illegally for another Member State of the European Union and vice versa.

Current affairs

In relation to the effects of the sinking in waters close to the Canary Islands of the Russian vessel 'Oleg Naydenov', the Vice-President of the Government explained that it is closely monitoring the situation, in coordination with the Regional Government of the Canary Islands. Continuous reconnaissance flights are being made, all the vessels available have been deployed in the zone to collect oil spills as and when detected, and a request has been made to study the possibility of sealing the identified leaks and the best options for future solutions.

As regards the extraordinary process of tax regularisation implemented by the government in 2012, Soraya Sáenz de Santamaría stated that given the strong loss of public revenue, the aim was to introduce new funds into the legal circuit in order to "expand the tax bases".

As opposed to other mechanisms introduced in the nineties, this was designed as an extraordinary and temporary procedure, in which the main focus was on "transparency". It sought to uncover income that was "not exempt from taxation", "not to pardon offences or write off outstanding tax debts in any way whatsoever", and for the Spanish Tax Agency to carry out "operations to verify these assets".

The Minister for Employment and Social Security highlighted that "the labour reform is offering positive results in creating stable jobs". In this regard, she specified certain figures in the latest Labour Force Survey: more than 60% of new jobs are permanent and 82% are full-time.

Furthermore, Fátima Báñez urged workers and companies to close wage bargaining processes at the earliest opportunity, within the framework of the agreement signed with the President of the Government last July, but without forgetting the unemployed.

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