The Government extended the timeframe of the reduction of employer contributions to the Social Security System

By Decree No. 68/2011, duly published on January 31, 2011 in the Official Gazette, the Government has extended until December 31, 2011 the Tax Adjustment, Employment Promotion and Protection of Registered Employment benefit scheme, established by section 16 of Law 26,476.

The benefit consists of a reduction of employer social security contributions (with the exception of health care and Work Risk Insurer contributions) regarding new employees.

The reduction consists of a discount of 50 % of employers´ contributions to the social security system during the first twelve months and 25 % during the second twelve months.

However, employers can not use this benefit regarding the following employees:

a) Those who have already been declared in the social security system and continue working;

b) Those who were declared in the social security system and after the termination of the employment relationship, are reinstated by the same employer within twelve months;

c) Those who are hired within twelve months from the termination without cause of a previous employment relationship and were registered at the social security system.

Furthermore, Employers will also be excluded from the benefit if unregistered employment is detected at the establishment and the benefit provided will be maintained as long as the total number of workers does not diminish up to two years after completion of the scheme.