Activate Portugal: Financial support to Portuguese employers engaging new employees

Financial incentive measures were approved to stimulate new employment amongst unemployed active people registered at the Portuguese employment and professional training agency (Instituto de Emprego e Formação Profissional).

The measure is subject to an application and aid grant calendar open, from time to time, by the Portuguese employment and professional training agency and the job offer must be publicized in a specific window of the Portuguese unemployment agency web site.

Access to the financial aid measure requires that when the employing company engages a new (previously unemployed) employee this increases the company’s headcount (when compared with same company’s average headcount for the 12 month period immediately preceding the job offer leading to the new employment agreement).

Apart from other conditions set forth in the regulation, aid granting requires that the engaged employee is offered (and keeps) the job position for, at least, (i) 24 months, in case of a permanent employment contract or (ii) 12 month in the case of fixed term contracts (initial contract duration must be, in this case, at least 12 months).

In the first case, the financial support is equal to 12 times the value of the Social Support Index (currently corresponding to € 438.81) and in the latter it will be equal to 4 times such index (in both cases, for full time contracts). In certain cases the amounts may be increased and the employer may also apply for a bonus for converting a fixed-term employment contract (entered into under this regime) into a permanent employment contract, in the amount equivalent to twice the payable monthly base remuneration, up to a maximum amount equal to five times the value of the Social Support Index.

Other requirements must be fulfilled in the application process and throughout the grant period concession.

For more information on these articles or any other issues involving labour and employment matters in Portugal, please contact Helena Tapp Barroso (Partner) or Pedro Pardal Goulã (Partner) of Morais Leitão at htb@mlgts.pt or pgoulao@mlgts.pt or visit www.mlgts.pt.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.