The global solution for human resource professionals, combines custom research, strategic white papers, country primers, webinars and OnDemand educational programs, and the expert guidance...
By Brett Allan King
Hiring freelancers in Portugal may require increased social security payments in 2018 under a broadened definition of “contracting entity.” Decree-Law 2/2018, published Jan. 8, alters both the definition of contracting entity and applicable social security contribution rates as of Jan. 1.
Under the revised rules, a service receiver will be considered a “contracting entity” if it provides more than half the service provider's income. The previous threshold was 80 percent.
“This is a first small step—and an important one—in the attempt to lift the veil on those situations where an independent worker is actually a medium- or long-term company employee who should have a contract,” Nídia Horta, a lawyer at Albino Jacinto & Associados in Lisbon, told Bloomberg Law by telephone Jan. 18.
The law also doubles the rate of social security contributions a contracting entity must make on behalf of workers more than 80 percent economically dependent on it to 10 percent. If a worker receives between 50 percent and 80 percent of income from the contracting entity, the rate is 7 Percent.
The revised regime fits into the government’s greater move on the controversial “green receipts,” which exempt companies from paying holiday and sick leave and from making social security contributions, liabilities the worker generally picks up under these circumstances. Green receipts are often abused to cover up actual employer-employee relationships.
While the government intends the law to improve the social protection of independent workers, Horta has her doubts.
“I think the measure is still more beneficial to companies” given that employers would have to pay much higher social security contributions were the economically dependent workers classified as employees.
To contact the reporter on this story: Brett Allan King in Madrid at firstname.lastname@example.org
To contact the editor responsible for this story: Rick Vollmar at email@example.com
Full text of Decree-Law 2/2018 is available in Portuguese here.
For more information on Portuguese HR law and regulation, see the Portugal primer.
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)