What are the grounds for denying access to Paef?

Law 2060 of 2020 extended the term of the Formal Employment Support Program (Programa de Apoyo al Empleo Formal -Paef- until March 2021.

Given the above, it is important to be clear about the grounds implemented by the Pension and Parafiscal Management Unit -UGPP- to deny access to Paef.

By means of Decree 639 of 2020, modified by Decrees 677 and 815 of 2020, the Formal Employment Support Program -Paef- was created, through which an economic contribution or subsidy is recognized to employers, to help them pay the payroll of their workers, due to the decrease in their income as a consequence of the effects of COVID-19 in the national economy.

The access to the Paef has certain requirements that its applicants (employers) must comply with to have access to it, thus arising a series of causes that the Pension and Parafiscal Management Unit -UGPP- has called “non-conformity”, which turn out to be situations for which this entity denies the access to the Paef to the applicant or denies the subsidy with respect to any particular worker who does not comply with the requirements established in the norm; therefore such causes are derived by scenarios of the employer or by situations of the workers. Let us get to know such grounds:

Causes of non-compliance on the part of the employer.

An employer may be rejected by the UGPP, the entity in charge of defining which applicants will have access to the Paef, if he/she is immersed in any of these causes:

1. it does not have registration or update in the commercial registry in 2019 or 2020; 2. it has not been registered or updated in the commercial registry in 2019 or 2020

In the case of non-profit entities, consortiums or temporary unions, it will be a cause for denial if they do not have RUT or are not obliged to declare income or income and assets.

2. It has shareholding participation of the Nation and/or its decentralized entities greater than 50% of its capital.

This refers to mixed companies, in which the majority shareholding is held by a State entity.

3. It is a natural person employer that had less than 3 workers reported in the integrated payroll of liquidation of contributions -Pila- in February.

This according to the provisions of article 2 paragraph 7 of Decree 815 of 2020, which establishes that for a natural person to be a beneficiary it must have contributed to integral social security, during February 2020, for three (3) workers or more.

4. Does not have a financial deposit product.

Given that among the requirements is that the applicant has a bank account where the support can be deposited, not having one is a cause of impediment to access state aid.

5. Made simultaneous applications for support in the same or different financial institutions.

The applicant will not be recognized as a beneficiary if the supervising entity realizes that the applicant had previously applied for the same support for the same period in this or a different bank.

6. When the employer in the month prior to the month of the application did not pay the salary of its workers.

The purpose of Paef is to support employers so that they preserve jobs and pay salaries to their workers; therefore, if in the month prior to the requested period the employer did not pay salaries to its workers, it will not be recognized as a beneficiary of the program.

7. Did not have a decrease of 20% or more in their income, as established in Resolution 2162 of 2020.

The decrease in income must be in accordance with the provisions of Resolution 2162 of 2020, which highlights that such decrease in income is evidenced:

– Whencomparing the income of the month prior to the request for the contribution, with the income of the same month of the previous year.

– When comparing the income of the month prior to the request with the average income of January and February 2020,theaforementioned decrease is reflected.

8. Is a politically exposed person -PEP- or is a spouse, permanent partner or relative in the second degree of consanguinity, first degree of affinity or sole civil partner of a PEP.

Article 2 of Decree 815 of 2020 states that such persons cannot be beneficiaries of this support.

9. Did not have employees reported in the Pila in the contribution period of February 2020, under the conditions indicated in the norm.

Pursuant to the provisions of paragraph 1 of Article 3 of Decree 677 of 2020 (modified by Law 2060 of 2020), the applicant must have made contributions through the Pila of its employees for the contribution month of February 2020.

This is due to the fact that the amount will depend, among other aspects, on the number of workers, as established in article 3 of Law 2060 of 2020.

10. It did not have employees reported in the Pila in the contribution period of the month of the subsidy, under the conditions set forth in the regulation.

In other words, in order to access the subsidy, the employer must demonstrate that each of the workers for whom he/she wants to receive the support made social security contributions in the month prior to the period in which he/she is applying.

Causes for non-compliance on the part of the worker

The UGPP, as the entity in charge of defining which of the workers among the applicants will be eligible for the subsidy, has established the following grounds for exclusion from the subsidy:

1.the worker is not found as an affiliate of the applicant, that is to say, that said worker for whom the support is intended to be requested does not appear as an affiliate of the applicant employer.

2.The worker did not pay contributions for the full month or paid contributions for that month below the legal minimum monthly salary in force.

3.The worker has the SNL novelty in the Stack, i.e., the worker was reported on unpaid leave.

4.The worker for whom the benefit is requested died, and when checking the information of the National Civil Registry Office, he/she appears as a deceased person before the first working day of the month immediately prior to the month in which the state contribution was requested.

Therefore, if you are subject to any of these reasons for non-compliance, you will most likely be denied as a beneficiary of the Paef for that period, since you do not meet the requirements established in the regulations.

Remember that if you have not applied to Paef before, you may do so for the next dates, as long as you are not immersed in any of the causes described above; the applications are made in the time available to the national government to do so before the financial entities.

Source: Actualícese