The PAEF (Program for the Support of Formal Employment) is a program of the National Government to support and protect formal employment through a direct subsidy to the payroll of dependent workers. This program has been created to respond to the economic and social consequences generated by the COVID-19 pandemic. The objective of the PAEF is to bring to the employer’s subsidies equivalent to 40% of a monthly minimum wage and extend access to these programs of benefits until December 2021.
However, due to the success of the PAEF in the last year, through formal requests from conglomerates of companies affected by the pandemic and the national strike, the National Government, through Law 2155 of 2021, access to the PAEF is reintroduced and extended for previous beneficiaries and new applicants. In general, there are two relevant changes:
|INCENTIVES TO SUPPORT COMPANIES AND EMPLOYER AFECTED BY THE PANDEMIC, THE ECONOMICAL RECESSION AND THE NATIONAL STIKES|
|Article 21. Extension to the Validity of the PAEF||
The validity of the PAEF is extended for potential beneficiaries who, in March 2021, would have had a maximum of 50 employees.
If the beneficiary at the time of application has more than 50 workers, they will not lose access to the PAEF, but they will only receive up to 50 subsidies.
|The State contribution can only be received once a month, but there is no maximum limit of applications throughout the year.
The validity until December 2021 will be extended until 31 December 2022, if by 31 December 2022, the economic unemployment indicators are in unfavorable conditions.
Article 25. Inclusion of New Types of Beneficiaries of the PAEF
|There will be new beneficiaries of the PAEF by way of a subsidy of 10% of a minimum wage to cover 40% of the worker’s social security value.
Corresponds to the Superintendency of Solidarity Economy and the Associated Work Cooperatives, the control, inspection and surveillance of the beneficiary cooperatives of the PAEF, and the incentive for the creation of new jobs.
|The Associated Work Cooperatives will be beneficiaries if they contribute to the pension system for the whole month, with a base contribution income of at least one monthly minimum wage.|
Key Action Points for Human Resources and In-house Counsel
Key Action Points for the PAEF’s program of incentives to support companies:
- The possible beneficiaries must acknowledge the possibility of the extension depends on the social and economic decline, especially in the labour and unemployment rate of this year.
- Even if the accessibility of the grants is limited to the number of workers, a company that has more than 50 workers, can have access of up to 50 grants.