Sunday, October 17

The shadow of ERTE fraud looms in companies where some 88,000 employees work

In the first fortnight of this month of October, companies in ERTE that want to extend their files must request it before the labor authority. The objective of the Government is to increase the control of the Administration, now that its number has been reduced and the monitoring of the mechanism is more manageable for the public employment services. Although the main goal of the new ERTEs is training, the extension also has an eye on avoiding the fraud that some companies are profiting from. One of the possible sources of abuse, CCOO and UGT insist, are the ERTEs in which companies no longer receive aid –although they do not pay their salaries–, which reach some 88,000 workers. “That smells very strange,” they point out from the unions.

The Government wants to focus on training and uncovering fraud in the new extension of the ERTE

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The latest number of workers in ERTE on the last day of September places their total number at 239,230, according to data published this Monday by Social Security. Of them, about two thirds (151,605) were in any of the ERTE modalities that were launched as of October 1, 2020, just a year ago, and that entail different exemptions to Social Security.

On the other hand, in just over a third of the total, 37% of those affected, were included in ERTE of force majeure or ETOP, no longer helping companies in the listing for companies. In absolute terms, “87,625 workers”, according to Social Security data. The vast majority of these employees work in small companies, as explained this Monday by the Secretary of State for Social Security, Israel Arroyo. The sector with the most ERTE of this type is commerce, “both wholesale and retail,” Arroyo pointed out.

Many months without activity, but with costs

The majority representatives of the workers warn of “how rare” or “suspicious” that the data of employees in ERTE is without aid for the companies after so many months of crisis. Especially when employees are fully suspended.

These companies remain in ERTE for a very long period, prior at least to the extension agreed a year ago, but they are paying Social Security contributions month after month. That is, despite not having activity in this long period for their staff to work, companies assume this expense every month for having them employed.

The assumption of costs without alleged activity makes the unions distrust, who warn that behind this data one of the frauds that most reaches them in relation to ERTE may be hidden: people whose companies make them work despite being suspended in one of these files for the pandemic. They may be fully suspended at ERTE or partially suspended, but they actually work longer hours.

In these cases of abuse, companies save workers’ wages, which are paid for with public money through unemployment benefit. According to cases reported to during the pandemic, sometimes companies offer employees to complete the strike to add up to their full salary and, in others, staff only charge 70% of the benefit.

New filter in this extension

Social Security does not consider that this is in itself an indicator of possible fraud and they remember that ERTEs are very flexible tools, through which companies can take and put workers in ERTEs according to whether they register more or less activity. In addition, they refer to the statements of the Secretary of State for Social Security, Israel Arroyo, who stressed this Monday that he does not believe that there are many companies zombies In the ERTE mechanism, as is known the companies that would only be “alive” thanks to the aid due to the pandemic, but that will not survive without it.

The sixth extension of the files due to the pandemic will in any case mean a new filter against fraud, of this or another type. On this occasion, the extension of the files is not automatic as in previous extensions, but the companies that want to extend their files must request it until October 15 and provide supporting information. The administrative procedure, in itself, can act as a barrier so that companies that have been taking advantage of the tool to date choose to stop parasitizing it given the scrutiny of the SEPE.

If this is not the case, the decree that regulates the extension warns that the labor authority will give approval (or not) to the applications, but also “will send the file to the Labor and Social Security Inspectorate, for the purposes that may eventually proceed.” As of June 1, the Labor Inspectorate had detected fraud in one out of every six ERTEs examined. In total, it imposed 5,459 offenses for a total value of 26 million euros.

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