Low-season employment has been aided by the social security reduction. | Archive

One consequence of the failure to pass the 2019 budget will be social security reductions for "fijo discontinuo" employees. The 50% cut in contributions in February, March and November for workers predominantly in the tourism industry has applied to some 60,000 employees. Lack of budget approval means that this will not continue.

This measure was first adopted in 2012 and has led to an estimated saving for businesses of 2,160 million euros. The vice-president of the Majorca Hoteliers Federation, María José Aguiló, has expressed her concern at the impact on recruitment. She is also worried by the "blow" to longer periods of active employment in the hotel, restaurant and retail sectors.

The difficulties with passing the budget have created uncertainty for businesses and for the tourism season, Aguiló notes. Now, these businesses will have to pay the full social security rates and may well have to put a stop to hiring.

An expert in labour matters, Carlos Sedano, explains that the 50% reduction cannot be extended (which is unlike other budgetary provisions that can be) because of specific legislative treatment. He says that the Spanish government could in theory ensure that there is an extension by issuing a royal decree but that this is complicated by the political situation in which the government finds itself.

Nevertheless, the hoteliers federation and the association for hotel chains are impressing the need for an extension on Bel OIiver, the tourism secretary of state. Aguiló adds that a meeting with Oliver is scheduled at which the importance of the social security reduction to the Balearic tourism industry will be stressed.