Several sectorial compensation funds mostly incorporated during the second decade of the twentieth century and in a nationwide basis are at the origin of the Portuguese Social Security system. These insurance funds were included in the Social Security System in the 70s, giving rise to the unified Social Security System. However, the General Retirement Fund, established in 1929 to ensure the protection of civil servants, maintained its autonomy, allowing employees of public administration benefit from a special regime. The employer and the employee are subject to social insurance contributions, which must be paid on a monthly basis. The global contributory rate is 34.75% of the contribution base. The employer is in charge of 23.75% and the employee of 11%. Nevertheless, the employer has to deduct the employee’s contributions from its gross wage and to deliver them to Social Security. Civil servants have a specific welfare protection scheme also subject to compulsory contributions. The Social Security System covers (i) sickness, (ii) maternity, paternity and adoption, (iii) unemployment, (iv) professional diseases, (v) disability, (vi) old age and (vii) death.
Healthcare and Insurances
The employer does not have a duty to provide any specific fringe benefits to an employee, such as health insurance, life insurance, etc. In a number of cases, nevertheless, this type of benefit is established in collective bargaining agreements and will be required and apply accordingly. All employers are required to retain insurance for the protection of employees against work related accidents.
At present, there are seventeen public holidays in a calendar year, in Portugal.
Employees are entitled to 22 business days of paid vacation per year. In the case of temporary contracts lasting up to 6 months, the employee is granted 2 working days of holiday for each completed month of service, and in the case of those lasting up to 12 months or ending in the year subsequent to the year of hiring, the employee is entitled to a holiday leave period proportionate to the duration of the contract.
Parental leaves granted for the birth of a child are provided under Portuguese law. These may be shared between the parents (in which case the total parental leave period may be 180 days). The mother may also enjoy up to 30 days of the parental leave before delivery. The employed mother will, in any case, be entitled to a minimum mandatory period of leave (six weeks following the birth).
The father has a specific mandatory paternity leave of 15 days, to be used in the 30 days following birth (5 such days must be used immediately following the date of birth).
In case of adoption of a child under the age of 15, the adopting employee has the right to a license equal to the Initial Parental Leave. The father and mother are entitled to supplementary parental leaves for child care (no more than 6 years of age).
The father and mother can enjoy any of the following types of regimes consecutively, or up to 3 interpolated periods:
- Extended parental leave for 3 months;
- Part-time work for 12 months;
- Interim periods of extended parental leave and part-time work (the total duration of absence must be equal to the normal working period of 3 months);
- Interpolated absences from work with a duration equal to normal working periods of up to 3 months.
Employees are entitled to receive a sickness allowance from the social security system when temporarily unable to work due to illness. The sickness leave suspends the employment contract as of 30 days and has no maximum period. Most employees are entitled to 1095 days of paid sick leave, independent workers and research fellows to 365 days of paid sick leave. The amount of the sick leave allowance depends on several factors and will range between 55% and 100% of the worker’s reference remuneration.
There are two types of disability leave and benefits in Portugal: 1) Disability pension and 2) Special protection in disability. The disability pension is a benefit attributed to persons who are permanently incapacitated for work. The special protection in disability is aimed at people who are incapacitated for work with a prognosis of rapid evolution, to a situation of loss of autonomy with a negative and irreversible impact on the profession they carry out, caused by specific diseases (familial paramiloidosis, Machado-Joseph disease, AIDS – virus human immunodeficiency virus (HIV), multiple sclerosis, cancer of the skin, amyotrophic lateral sclerosis, Parkinson’s disease, Alzheimer’s disease and rare diseases or other diseases of non-professional or third party liability, sudden onset or early onset).
Other Required or Typically Provided Leave
After the right to a supplementary parental leave has been exhausted in any of the aforementioned modalities, the parents are entitled to leave for childcare. This license can be taken consecutively or interpolated and lasts for a maximum of 2 years or 3 years, in the case of up to 2 children or more, respectively. During the enjoyment of this license, the employee cannot carry out any work activity for other employers or activity that implies absence from his usual residence. Parents are entitled to leave for up to 6 months (extendable up to 4 years) for assistance to a child suffering from disability or chronic illness. If the child is 12 years of age or older, the need for assistance must be confirmed by medical certificate.
Supplementary Leaves of Absence
Other licenses or leaves of absence are provided for in the following situations:
- Exemption from work by a pregnant or breastfeeding employee, in order to protect her safety and health;
- Waiver for prenatal consultation;
- Exemption for evaluation for adoption;
- Waiver (reduction of working hours) for breastfeeding;
- Waiver from some forms of working time organisation;
- Exemption from the provision of overtime;
- Exemption from night work.
Pensions: Mandatory and Typically Provided
The typically provided pension, besides those previously mentioned for illness and disability cases, is the old-age retirement pension, which is comprised of a monthly amount paid to protect the beneficiaries of the general social security scheme, in the old-age situation, replacing the remuneration of work. In 2018, the retirement age was set at 66 years and 4 months, and, as stated in the introduction, it increased by one month for 2019, being 66 years and 5 months. If the person in question is younger than the aforementioned ages, they may be eligible for one of the following: i) early retirement due to long-term unemployment; ii) early retirement under the age flexibility scheme; and iii) special schemes for anticipating the age of access to the old-age pension – exercise of activity in certain professions. In general, employees must have a minimum of 15 calendar years of work with records of remunerations, or 144 months with records of remuneration – beneficiary covered by voluntary social insurance.