ERTE, what is it and how does it affect my company

We are going to detail some of the news about the ERTEs regulated in Royal Decree 8/2020 due to the coronavirus crisis.

What is an ERTE?

The ERTE (“Temporary Employment Regulation File”) is a measure that already existed in the Workers’ Statute prior to the coronavirus crisis.

Through an ERTE, an employment contract can be suspended or a reduction in working hours can be agreed upon.

It can be applied both for force majeure and for economic, technical, organizational or production reasons (objective causes).

In the ERTE of suspension of the employment contract, the worker who does not provide services stops receiving his salary and begins to receive an unemployment benefit. In the cases of ERTE due to a reduction in working hours, there is a reduction of between 10% and 70% of the working day and the unemployment benefit is received based on the percentage reduction.

The ERTE has undergone notable variations through Royal Decree Law 8/2020 for the adoption of measures while the coronavirus crisis lasts.

ERTEs during the Coronavirus

Royal Decree Law 8/2020 develops measures for both the ERTE due to force majeure and the ERTE due to objective causes. We will detail some points below.

In Royal Decree Law 8/2020, it is foreseen that there is a cause of force majeure when an ERTE occurs due to a direct cause of loss of activity as a result of COVID . Special mention is made to the declaration of the state of alarm.

ERTE due to force majeure

It will be considered that there is a cause of force majeure when there are losses of activity that are a consequence of the following situations: suspension or cancellation of activities, temporary closure of places of public influx, restrictions on public transport and, in general, on the mobility of people and/or merchandise, lack of supplies that seriously impede the continuation of the ordinary development of the activity, or in urgent and extraordinary situations due to the contagion of the workforce or the adoption of preventive isolation measures decreed by the health authority, which are duly accredited.

To control the reality of the situation, the Labor Authority must give its approval, on the existence of force majeure, within a period of 5 days.

The Royal Decree Law allows companies with less than 50 workers not to pay their Social Security contributions during the suspension of contracts or the reduction of working hours. In the case of companies with more than 50 workers, they will be exempt from paying 75% of the social security fee.

  • ERTE for economic, technical, organizational and production reasons (objective causes)

Companies may also choose to file an ERTE for economic, technical, organizational and production reasons related to COVID-19.

That is to say, although in the previous case, we are faced with an ERTE due to force majeure (defined in the Royal Decree itself); In this case, we find a reduction in demand or an oversize of the workforce while the COVID crisis lasts.

In this case, unlike the previous one, companies must continue to pay social security contributions.

In this case, the deadlines are different and there will be a consultation period between the company and the workers of seven days. The Labor and Social Security Inspectorate must issue a report within a period of 7 additional days.

This publication does not constitute legal advice.

Free legal advice for COVID

Finally, and although we are lawyers specialized in digital businesses, we remind you that, while the state of alarm lasts, from LAW4DIGITAL We will also be offering free legal advice for COVID to health professionals and members of the State security forces and bodies who are helping us so much in these complicated days.


How can LAW4DIGITAL help you?

At LAW4DIGITAL we are lawyers specialized in digital business. We provide comprehensive legal advice to digital companies. We help you with online legal advice.

We will keep you updated about digital business. In any case, you can contact us by sending an email to, calling (+34) 931 444 820 or filling out our contact form at

We look forward to seeing you in the next post!

Law4Digital Team.

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