For those who work as trabalhadores independentes (as self-employed), life can be somewhat more challenging than for employed workers, especially when it comes to taking a vacation. If you work in a self-employed mode (recibos verdes, as they are called in Portugal), you are undoubtedly accustomed to having a more flexible schedule than if you had an employment contract, and this independence can give a sense of greater freedom. However, in reality, self-employed service providers do not enjoy all the rights that workers with a traditional employment contract do. On one hand, they are not required to obey a boss or adhere to a hierarchy, but on the other hand, this freedom means that self-employed workers almost always do not have the right to paid vacation. This is one of the main issues for those who have decided to work as self-employed. In this article, we will discuss in detail the right to vacation for self-employed workers, compare them with contract workers, analyze service provision contracts, and examine the associated rights and obligations.
Vacation is one of the basic rights of employees enshrined in labor legislation, but the procedure for granting it depends on the type of employment relationship. At the same time, vacation is one of the biggest issues for those who work as self-employed. While contracted workers are guaranteed paid vacation by their employer, self-employed workers face a different dynamic. With no single employer and no fixed work schedule, the self-employed are free to take time off and vacation whenever they want, but do not enjoy the same benefits as contract workers, such as no vacation pay. This difference becomes even more apparent when it comes to additional holiday periods such as Christmas, for example. The self-employed have no extra vacation, unlike salaried workers who receive their thirteenth and fourteenth paychecks. The issue of a well-deserved vacation for the self-employed becomes quite acute, since for them a period without work means a reduction in income. Employees who have a contract with a company continue to receive their normal salary, thanks to the vacation allowance guaranteed by their employer's contributions to the Segurança Social insurance fund.
But it's not all terrible, as there are service contracts disguised as service provision that can conceal real employment relationships (the rights and obligations of both the employer and the employee), guaranteeing, in particular, paid vacation. This is especially common in contracts that establish longer periods of working relationships between the service provider and the company. Economic dependence plays a crucial role in the relationships between self-employed workers and the organizations for which they work. From the 13th month of the self-employed worker's service, the social security system controls these relationships, establishing additional contributions that make up a significant portion of the self-employed worker's income. (11%). This degree of dependence also plays a special role in securing such rights as unemployment benefits. In short, the regulation of vacations and other rights of self-employed workers is complex and depends on the type of contract and the degree of economic dependence on the counterparties.
Historical Background. In 1936, the right to paid vacation first appeared in French law, and Portugal followed suit in 1937. Four years later, the first legislative act guaranteeing this right was issued. Today, the right to vacation for employees is enshrined in labor legislation. This is justified by the need to "ensure the worker's physical and psychological recovery, conditions for personal presence, integration into family life and participation in social and cultural life". According to Article 238 of the Labor Code (Artigo 238.º do Código do Trabalho), the length of annual leave for persons employed by an employer is at least 22 working days. According to the Freelancer Study, self-employed workers take, on average, 25 days of vacation per year, but they work, on average, more than employees, namely 45 hours per week.
So, let's move on to the main question of the article: do trabalhadores independentes in Portugal have the right to vacation? If there is no employment contract, the regime stipulated in the service provision contract concluded between the parties applies. Theoretically, self-employment is a status that allows for the provision of various services on a freelance basis. This possibility depends on the field of activity in which the self-employed person works. Self-employed workers have a special status because, as professionals, they do not have hierarchical subordination and can act autonomously, enjoying various privileges, including being exempt from a fixed work schedule, as we have already mentioned. Therefore, it is assumed that engaging in activities under such conditions means that the specialist can freely manage their presence at work, and, accordingly, their vacation.
Self-employed individuals are responsible for performing the services agreed upon with the organization and receive payment based on the completion of this task (the so-called piece-rate payment system). On the other hand, vacation is a legally enshrined right for every worker. Thus, self-employed individuals, like any other workers, naturally can take vacations, which is their legally guaranteed right; however, they will not be paid during this period. Such workers can provide services to one or more organizations, but, in any case, these organizations are not obligated to pay them vacation pay. It should be noted that the degree of freedom for self-employed workers varies: there are more independent workers, and there are less independent ones. When there is a service provision contract, full independence is no longer the case, such as when working exclusively for one organization. This format is similar to a traditional employment contract, which is why it is popularly called a false recibos verdes. Let's analyze this situation in more detail.
Service contract or freelance contract. A self-employed worker may have a service contract, which means that the employee is not so independent. In fact, when such a contract exists, it may be an employment contract in disguise, in which case you may be entitled to vacation pay (read the contract carefully before signing).
A contract of hire is a type of service contract. This type of contract is defined by Portuguese law, in particular article 17 of Decree-Law 41/84 of February 3 (Artigo 17º do Decreto-Lei 41/84 de 3 de fevereiro), as amended, and article 7(3) of Decree-Law 409/91 of October 17 (N.º 3 do artigo 7.º do Decreto-Lei n.º 409/91, de 17 de outubro). This contract is a service contract, and is concluded between a free (independent) professional and a company in order to ensure the fulfillment of a specific task to be performed within a certain period of time. This type of contract can be entered into in either the public or private sector and has a fixed remuneration. The contracts concluded under such conditions are subject to the special rules provided for in the above regulations, otherwise they may be recognized as employment contracts, with legal consequences for both the employer and the employee.
In any case, if you only work for one organization full-time, even freelance, based on work ethic, you should certainly notify management in advance of when you will be taking leave. But remember, 99% of the time, it's a leave of absence at your own expense. As I mentioned earlier, unlike employees hired under a labor contract, the self-employed are personally responsible for paying social security contributions (that's why we get a NISS social security number). For this reason, a self-employed worker's vacation is unpaid, whereas employees with an employment contract are entitled to do so, because the employer makes the contributions for the employee. This means that while a self-employed worker may enjoy a long-awaited vacation and be able to leave at his or her convenience, he or she does not have the same benefits as other employees with an employment contract. They receive vacation pay for the time off.
And lastly, a few tips from experienced self-employed people! It is important to organize your work and budget so that you can take vacations without affecting the family budget. Therefore, in the case of freelancers, vacations require additional planning and organization.
- When setting the cost of your services, be sure to include vacation days when making your financial plan. First, determine how many vacation days you want to take, then calculate your hourly rate based on how many weeks you will work. Let's say you decide to take four weeks of vacation. You need to subtract those four weeks from the 52 weeks you have in a year. This works out to 48 working weeks in a year. Then the amount you charge per hour you work should be calculated based on 48 working weeks. This calculation will help you manage your personal finances well and still be able to take vacations.
- Plan your vacation dates in advance and for periods when you work less. Write your vacation in your day planner in advance, and don't cancel it. If the industry or type of service you offer is somewhat seasonal, try to schedule most vacations for periods when there is less work, which will reduce the loss of clients and revenue.
- Let your customers know in advance. By planning the holidays in advance, you can also give your clients plenty of time. This way, you can coordinate the projects you're working on together.
- Forecast your work. If you have time, reschedule work for the weeks leading up to your vacation.
- This may mean you'll have twice as much work to do in previous weeks, but it's a good strategy if you haven't planned your hourly rate with your vacation in mind. Also, plan your things to do immediately upon your return - things you'll need to do on short notice.
- Delegate work or subcontract work. If you don't want to completely put off certain projects or clients, don't be afraid to ask for help.
In general, we have already written a lot about work in Portugal, in different statuses, in the Work section of our website. In addition to the current topic, in the Articles section, you can get acquainted with the whole range of issues related to life in Portugal, read the articles, there is a lot of interesting applied information! By tradition, I wish you all success in your work! And I hope you will find this article useful. I hasten to remind you that, of course, our articles do not answer all questions, do not deal with individual cases, but are an informational guide. In order for you to get personalized advice, we have gathered for you the best specialists in various fields in Portugal. You can contact a lawyer and other specialists without leaving our portal. And if you need help in buying a property in Portugal - our team of real estate agents in all regions of the country will solve your question. See you soon!
