The Portuguese investment immigration policy is known as one of the most suitable investment immigration programs for Chinese people. After obtaining local residency through immigrating to Portugal, the first issue faced is employment. Portugal is one of the countries in the European Union with stricter regulations, and the costs of hiring and dismissing employees are relatively high. Let us understand the employment essentials in Portugal.
Signing a Labor Contract
There are three types of work contracts in Portugal: long-term, fixed-term, and service contracts:
1. Long-term contract. This type of contract does not specify a duration and can only be terminated under conditions specified by labor law.
2. Fixed-term contract. This usually refers to a contract signed for the completion of a temporary job, to substitute for employees on sick leave or maternity leave, with a specified duration, generally lasting 6 months. The contract ends upon completion of the work task. By mutual agreement, the maximum duration can be extended to 3 years; beyond 3 years, it is considered an indefinite contract.
3. Service contract. This is a work agreement for providing intellectual or physical services, such as completing a specific task, providing technical services, or home renovations. The parties do not have an employment relationship but a cooperative relationship.
The probation period in Portugal is generally 60 days, with the maximum probation period for regular workers extendable to 180 days, and for important positions such as senior management or professional technical personnel, it can be up to 240 days.
Termination of Employment Contract
For fixed-term contracts, the employer must provide written notice to the employee 15 days in advance of the termination date. In the case of indefinite contracts, the employer has the right to terminate the labor contract if any of the following conditions are met: there is sufficient reason or evidence for dismissal, the employee retires, becomes ill, dies, or if the company closes or liquidates debts.
The employer can implement collective layoffs under the following circumstances: business closure, financial crisis, business or product transformation, changes in production processes, large-scale automation, computer application, technological updates, significant reductions in market demand, or upgrades in market access conditions.
Employees have the right to resign, usually requiring a written notice to the employer 30 days in advance. Employees have the right to request termination of the service contract under the following circumstances: the employer fails to pay wages on time, infringes on the employee's legal rights, the work environment poses safety hazards, health is threatened due to poor sanitary conditions, misappropriation of the employee's personal finances, causing personal or psychological harm, restricting personal freedom, or defaming personal honor and dignity.
Labor Compensation
Portugal stipulates that the minimum monthly wage standard in 2010 was 475 euros, which was raised to 485 euros in 2011. In addition to paying 12 months of wages, the employer must pay an additional 2 months' salary as annual vacation and Christmas holiday allowances, with the employee's annual salary calculated over 14 months. Employees are entitled to 22-25 working days of paid vacation each year.
Working Hours
Portuguese labor law stipulates that employees may not work more than 8 hours a day, with a maximum of 40 hours per week. Overtime may not exceed 2 hours per day, and the total accumulated overtime in a month may not exceed 50 hours. The first hour of overtime is paid at 150% of the regular wage, and subsequent hours are paid at 175%. Overtime on holidays is paid at 200% of the regular wage. Night shift wages, from 10:00 PM to 7:00 AM the next day, are 25% higher than regular wages. Employees must have at least one day off per week; if working continuously for 48 hours, they must have at least 11 hours of rest. Maternity leave is 120 days, with 90 days required to be taken consecutively after childbirth. For multiple births, an additional 30 days of maternity leave is granted, and the father of the infant is entitled to 5 days of paternity leave.
Employee Social Insurance
Social insurance in Portugal is jointly paid by both the employer and employee, with the employee's contribution being 11% of total wage income, deducted by the employer when paying wages; the employer pays a social insurance rate of 23.75% of the employee's total wages. Since 2009, labor law has added provisions allowing youth under 30 years of age to pay social insurance for 3 years.
If foreign employees work in Portugal for less than two years and are covered by their home country's social insurance system, they can pay social insurance in Portugal. If a foreign company employs local Portuguese employees who meet the following conditions, such as long-term unemployed individuals and employees aged 16-30, the employer may be exempt from paying employee social insurance for the first 3 years.