The activity of a Temporary Work Agency consists of the temporary assignment of workers to user companies, with the ETT itself being responsible for the recruitment and remuneration of those workers. This activity may be carried out either by an individual, acting as a sole trader, or by a legal entity, through the incorporation of a commercial company.
The first step is the choice of the legal form and, subsequently, the obtainment, from the National Registry of Legal Persons, of a certificate of approval of the company name, it being mandatory that the corporate name includes the expression “trabalho temporário”.
Once such certificate has been obtained, the company may be incorporated and, thereafter, the licence to carry out the temporary work activity must be requested, which is granted in the form of an official operating licence (alvará).
The granting of the licence depends on the cumulative fulfilment of several essential requirements, namely: (i) the suitability and integrity of the shareholders and managers, (ii) the existence of an adequate organisational structure, (iii) a regular tax and social security situation, (iv) a compliant corporate name, (v) compliance with the obligation to declare the beneficial owner (RCBE), and (vi) the provision of a security deposit (bond).
The suitability requirement is deemed to be met where the company and its shareholders, directors or managers have legal capacity to perform commercial acts, are not suspended from or prohibited from carrying out the activity, are not associated with entities that have outstanding debts to employees, the Tax Authorities or Social Security, and have not been convicted of offences related to illegal immigration, human trafficking, slavery, labour, tax or social security crimes, nor of very serious labour administrative offences within the legally relevant periods.
With regard to the organisational structure, an ETT must have at a minimum:
- a full-time technical director with a higher education degree and at least two years’ professional experience in the field of human resources.
- a qualified employee responsible for the financial and administrative area (or the outsourcing of such services); and
- a full-time employee for in-person public service.
In addition, the company must maintain a workforce corresponding to at least 1% of permanent employees in relation to the average number of temporary workers, as well as its own premises, duly identified and suitable for the exercise of the activity, including workspaces and areas for public service.
Licence application
The licence application must be submitted electronically to the IEFP – Institute for Employment and Vocational Training, and must be accompanied, among others, by the following documents:
- a sworn declaration by the applicant.
- criminal record certificates of the responsible persons.
- a certificate issued by the ACT confirming the absence of suspension or prohibition of the activity.
- a commercial registry certificate.
- RCBE declaration.
- declaration of commencement of activity indicating CAE 78100.
- certificates or authorisations for consultation of tax and social security status.
- declarations of suitability.
- evidence of the organisational structure; and
- declaration of constitution of, or commitment to constitute, the security deposit.
The security deposit is mandatory and aims to guarantee the payment of wages and other charges related to temporary workers. Its base amount corresponds to 150 times the national minimum monthly wage (RMMG), increased by the applicable global social security contribution rate, and may be increased depending on the average number of temporary workers employed by the ETT, reaching higher thresholds of 200, 250, 300, 400 or 500 times the RMMG. The security deposit may be provided by cash deposit, bank guarantee payable on first demand or insurance, and must be updated annually.
Once the licence has been granted, the ETT is subject to several ongoing obligations, including indicating the number and date of the licence in all external documentation, communicating workers and user companies to Social Security, including temporary workers in the Annual Single Report, complying with personal data protection rules, maintaining the required organisational structure, and periodically reporting workers assigned to provide services abroad.
The IEFP also maintains a National Register of Temporary Work Agencies, publicly accessible, listing licensed agencies as well as those whose licence is suspended, expired or revoked.
The creation of a Temporary Work Agency therefore requires careful planning and strict compliance with legal requirements, and specialised legal advice is highly recommended to ensure a swift, secure and fully compliant process.
Belzuz Abogados, S.L.P. – Portuguese Branch is an Iberian law firm with offices in Lisbon and Porto, with extensive experience in assisting with the incorporation and licensing of Temporary Work Agencies, providing comprehensive advice in corporate and regulatory matters.