The General Confederation of Portuguese Workers – National Interunion (CGTP-IN) has criticized a new government measure that takes effect today, describing it as an “incentive for companies to continue paying low wages subsidized by public funds,” while “young unemployed people are reduced to a reserve of cheap labor, available for any type of work.”
The union confederation argued that instead of promoting precarious job conditions and low wages, the government should revoke damaging labor code regulations and promote stable employment and fair wages compatible with a decent standard of living.
The CGTP further assessed that the “incentive for the adoption of fixed-term contracts with public support” aligns with the government’s broader labor law reform proposals, which it classified as “an offensive against fundamental workers’ rights and a deepening of the path of regression and deregulation of working conditions and workers’ rights.”
The measure in question is an “exceptional incentive for returning to work,” targeting unemployed young people aged under 30, registered with the Institute for Employment and Vocational Training (IEFP), and receiving unemployment benefits.
Eligible individuals who sign a contract after the implementation of this ordinance, published in the Diário da República on Tuesday, may receive support equivalent to 35% of the monthly unemployment benefit for an indefinite employment contract or 25% of the monthly benefit for a temporary employment contract or an indeterminate temporary contract.
To access this support, applicants must apply through the IEFP website “within a maximum of 30 consecutive days from the start date of the employment contract,” be registered on the respective portal, have a “bank account in their own name,” “not be in violation with respect to tax and social security obligations” and not be in default regarding support granted by the institute.
“Applications are approved in the order of entry, up to the budgetary allocation limit,” the ordinance states, also noting that the IEFP has 10 business days to approve or reject the support following the application submission.
The government stated that the goal of this measure is to “promote swift professional reintegration, reduce the average duration of unemployment, improve placement rates, and contribute to the rationalization of public expenditure on social benefits.”
The labor market in Portugal has been nearing full employment, with the unemployment rate falling to 6.1% in August, down from the same month in 2024, according to the latest figures released by the INE.
However, youth unemployment, although decreasing in recent months, remains high. The youth unemployment rate stood at 18.9% in June and August 2025, the lowest since June 2023 (18.5%).
