In the past month, there have been several labour and employment law developments, chief among them: i) newly defined measures regarding the Legal Aid for Transport subsidy granted to workers and ii) the judgement of the Constitutional Court declaring the Financing Law to be unconstitutional.
I. Clarifications on the Legal Aid for Transport
The Legal Aid for Transport is a subsidy granted to workers who earn up to two minimum wages, by which the employer has the obligation to endow an amount of money to the employee each month for transport purposes.
In recent days, the Ministry of Labour issued its Legal Concept related to the recognition of the Legal Aid for Transport for those workers who, having a salary equal to or less than two minimum wages, have received payments for supplementary or overtime work, which has caused them to exceed the prescribed salary limit to receive aid.
Therefore, the Ministry has determined that the payment of supplementary and overtime work does not affect the limit amount for the granting of the Transportation Assistance, given that the monetary income taken into account in order to determine the limit of two minimum wages, is the salary corresponding to the ordinary working time.
Legal concepts issued by the Ministry are non-binding, however, they constitute a frame of reference on the understanding that authorities have regarding the fulfillment of labour obligations.
II. Financing Law declared Unconstitutional
Law 1943, also known as the “Financing Law”, was issued in 2018 in order to encourage tributary payments by granting temporary tax reductions and other benefits that were applicable to payments and retentions on labour income. Nonetheless, the Constitutional Court has declared the Financing Law to be unconstitutional, as a result of the undue process preceding the issuance of the Law. As for the practical effects resulting from the Constitutional Court’s decision, the Court has declared that the unenforceability of the Law will not start until January 2020, corresponding to the timeframe wherein a new Financing Law should have been issued.