Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Minimum Wage and Social Support Protection

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva – DCM | Littler

The minimum wage for 2023 was increased, pursuant to Decree-Law 85-A/2022 of December 22. Accordingly, in the continental territory of Portugal, the minimum wage is EUR 760 (increased from EUR 705). In the Madeira Autonomous Region, the minimum wage is EUR 785 (increased from EUR 723). In the Azores Autonomous Region, it is EUR 798 (increased from EUR 740).

This increase follows the Portuguese Government’s objective of achieving the EUR 900 monthly wage by 2026. Additionally, despite the minor 1% increase in the value of the Index of Social Supports (social protection) between 2021 and 2022, this value has also been recently updated with a considerable 8.4% hike, “skyrocketing” from EUR 443.20 to EUR 480.43.

Additional Expenses in Teleworking

New Regulation or Official Guidance

Authors: David Carvalho Martins, Partner and Head of Employment, and Maria Beatriz Silva – DCM | Littler

On January 18, 2023, the Portuguese Tax Office (AT) published a legal understanding of how to set the practical solutions regarding the compensation of additional expenses borne by the employee while teleworking, from a tax point of view. According to the general framework, employers are required to fully compensate employees for any additional expenses incurred by reason of teleworking, provided the employee successfully proves that the employee now bears these expenses. These expenses include increased energy costs, network installation at the (home) workplace with sufficient speed for service communication needs, and maintenance costs for equipment and systems. This method requires a permanent system of monthly comparisons between current and one-year-old invoices.

The general framework also established that the compensation of the additional expenses is considered a cost to the employer and does not constitute an income to the employee. In many Collective Bargaining Agreements (CBA), for greater ease, a lump sum for compensation has been established to be paid monthly by the employer with express reference to this ground (e.g., CBA of Casa da Moeda).

However, the Tax Office takes away from the lump sum the nature of compensation on expenses to give them the physiognomy of labor income, subjecting teleworkers to greater taxation. The new legislation to be enacted is a result of the Decent Work Agenda. This legislation will establish, for tax purposes, a maximum amount to consider the teleworking additional expenses as a cost to the employer.

New Decent Work Agenda Law, Effective May 1, 2023

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and João Villaça – DCM | Littler

The Decent Work Agenda was approved and enacted on March 22, 2023, and the new legislation is set to take effect on May 1, 2023.

The new legislation will modify the Labor Code in significant areas of the labor and employment framework. The new law will cover, among others, (i) the labor presumption regarding providers on digital platforms (for re-classification purposes), (ii) Collective Bargaining Agreements for specific service providers (providers that are dependent of the beneficiary, (iii) greater variety of the paid parental leave, (iv) greater variety of paid days for bereavement, (v) a new leave of absence for gestational mourning, (vi) the prohibition of outsourcing after a redundancy, and (vii) the increase of compensation within the context of redundancies and after termination of a employment contracts for fixed-term or uncertain term.

Mandatory Quotas to Employ Persons with Disabilities

New Legislation Enacted

Authors: David Carvalho Martins, Partner and Head of Employment, and João Villaça, – DCM | Littler

The Law 4/2019 of January 10 established the system of employment quotas for persons with disabilities with an incapacity equal to or exceeding 60%. The primary objective of this law is to facilitate the integration of individuals with disabilities who possess the capability to perform job functions without experiencing significant functional limitations. Even in cases where such limitations are verified, reasonable adjustments to the job or work environment should be made to overcome these barriers and to enable their full participation in the organization. To allow companies to adapt and reorganize themselves, this law established a five-year transition period.

Effective February 1, 2023, medium-sized companies with 100 to 249 employees are required to ensure that at least 1% of their workforce (quota) consists of employees with disabilities or incapacity of 60% or more. Large companies, consisting of 250 or more employees, must implement a quota of no less than 2% of the staff at their service. Failure to comply with these quotas may subject the employer to serious administrative offenses. Exemptions may be made for several reasons, including if the company can establish that it is impossible to fill the job position or there are not sufficient number of disabled or incapacitated candidates registered at the Portuguese National Employment Center.