Understanding the Management of Contracts Fewer Than Seven Days

In accordance with the specifications of Additional Provision Six of Law 12/200, an employer's common contingencies quota for Social Security must increase by a fixed percentage, as determined by INSS, for employees whose contracts are temporary and have an effective duration of fewer than seven days. The increase to the common contingencies quota at the time of publication is currently 36 percent. The system stores the value of this percentage increase in the SS VR PCT 7D variable. Employers must include data reflecting this increased common contingencies quota when reporting to Social Security through the RED system FAN File and the TC1 Report.

To determine the effective duration of an employee's contract, the system uses the contract begin date and contract end date on the Contract Status/Content page of the Update Contracts component. When a contract has a duration of fewer than 7 days, the system assigns a value to the SS VR CONTR 7D FLG variable to indicate this fact.

For employees with contracts fewer than seven days, select Temporary in the Regular/Temporary field on the Job Information page of the Job component. There are some contracts that are not affected by special extra contribution even if they last less than 7 days, for example, interim contracts 410/510 . Those contracts are identified in the bracket SS BR CNT <7D.

The RED system FAN File and TC1 Report reflect data related to employee contracts that have an effective duration of fewer than 7 days. The TC1 Report includes related key, base, percentage, and quota data under the Other Concepts key. The FAN File includes the additional quota in the line EDTCA11 under the Other Concepts key and updates the amount for line EDTT10 accordingly.