Have you heard of the failure allowance? Certain employees are eligible for a risk compensation allowance, a provision outlined in law for specific cases. It is generally granted to professionals with responsibilities involving the management of money or equivalent assets.
“The failure allowance is a remunerative supplement or increment allocated for a specific peculiarity of work performance, involving the handling of money or valuables (such as a toll collector). It is characterized and justified as a subsidy to compensate employees for the expenses and risks inherent in such tasks, which may result in accounting discrepancies in treasury operations,” states the official repository Diário da República.
It should be noted that the “failure allowance generally does not have a wage or remunerative nature, unless it exceeds the amount considered normal or is deemed part of the worker’s compensation due to contractual or customary labor use (Article 260, paragraph 2 of the Labor Code)”.
In practice, this payment aims to compensate employees for risks, errors, and potential damages in the execution of their duties.
How much is received?
There is no universal amount set by law, meaning that the payment usually varies by sector and what is defined in collective agreements—in the private sector.
However, in the public sector, several decrees have set the failure allowance at 86.29 euros (an example can be seen here): “The monetary amount for the failure allowance was fixed by Ordinance No. 1553-C/2008, of December 31, at 86.29 euros, and in all situations, its provision depends on actual work performance and only as long as the conditions for its allocation exist.”
Who is entitled?
It is important to emphasize that this allowance is not directly linked to the position held, but rather the functions performed, making the responsibility of the role the determinant for allocation (or not) of the allowance.
The law stipulates that this remunerative supplement is entitled to “workers who handle or are responsible for in treasury or collection areas values, currency, securities, or documents”.
This means it can be paid to employees of commercial establishments, banks, or similar institutions, to professionals with management or verification duties, or to employees of transport companies and service stations.
Remunerative supplement: What is it?
“A remunerative supplement refers to the compensation increment due to the performance of functions in work positions that have more demanding conditions compared to others characterized by the same post or by similar careers and categories,” states the Directorate-General for Administration and Public Employment (DGAEP).
Additionally, “remunerative supplements are only owed to those occupying positions with more demanding conditions and while the conditions resulting in their allocation persist, necessitating the effective exercise of functions (or legally foreseen equivalence)”.
It should also be noted that “supplements are exceptionally fixed as a percentage of the monthly base salary; they should primarily be denominated in monetary amounts,” and “when the originating situation persists for more than a year, the remunerative supplements are due and paid over 12 months per year”.
“Remunerative supplements are only created by law, and can be regulated by collective labor regulation instruments,” as further noted on the DGAEP website.
