Temporary accommodation for construction workers: New rules

Decree-Law 123/2025 of November 21 (“Decree-Law 123/2025”) has been published, aimed at:

• updating the 1965 regime established by Decree 46 427 of July 10, by defining the main requirements applicable to temporary accommodation for construction workers; and
• expediting the execution of construction-related works by exempting temporary accommodation works in adapted or provisional buildings from prior urban development checks—this aims to liken this accommodation to a satellite facility of the construction site it serves.

The new rules are binding on both public and private entities. Specifically, this applies to construction, alteration, extension, reconstruction, preservation, demolition, and land remodeling works.

Decree-Law 123/2025 enters into force on December 21. Accommodation designed or existing on that date must be adapted within 12 months to comply with the new requirements.

Employers are permitted to replace monetary accommodation allowances with the provision of temporary housing, provided the employee agrees in writing. This applies to direct employees, employees on temporary contracts, and employees assigned on a temporary basis.

Employers are responsible for all costs related to the housing and must ensure that it meets standards for rest, hygiene, ventilation, lighting, safety, and comfort.

Temporary housing must only be used for the duration of the corresponding works, and employees may not reside there for more than 36 continuous months. If the works extend beyond 36 months, employees can either remain in the housing or request accommodation allowances under the applicable legal and contractual framework.

The work required to set up temporary accommodation in provisional or adapted buildings is exempt from prior urban development checks under the Legal Regime on Urban Development and Building (LRUDB). However, entities must still draft architectural and speciality plans.

Also, under Decree-Law 123/2025, construction must comply with protection regimes for sensitive areas, such as Natura Network sites, REN/ RAN (national or agricultural reserves), classified assets, administrative easements, and the public domain. Consequently, non-compliance with these restrictions is prohibited.

Technical standards for fitness for purpose, health and safety, comfort, dimensions, facilities, and environmental impact will be approved through a government ordinance. Until this ordinance enters into force, the accommodation, the plan and the other elements must comply with the existing legal and regulatory frameworks.

Three types of temporary accommodation are permitted:

• Temporary buildings: Lightweight or modular constructions removable once the project is complete.
•  Adapted buildings: Preexisting non-residential structures converted for temporary housing during the works.
•  Existing residential buildings: Preexisting structures that do not require structural modifications.

The accommodation that employers choose must be practical, non-discriminatory, and tailored to the project’s characteristics and duration, the number of employees, location, and availability of nearby housing.

Preferably, accommodation should be located onsite. If this is not feasible, it must be as close as possible without compromising employee rest periods or accessibility to key infrastructure.

Technical rules on maximum capacity and the dimensions of functional units will also be detailed in a forthcoming ordinance.

In addition to the choice regarding accommodation type and location, employers must also comply with the following new requirements:

• Temporary accommodation plan: The entity executing the work must prepare this plan and integrate it into the health and safety plan.
• Prior inspection: Within 10 days of approval/partial approval or completion of the works, the site’s safety coordinator must conduct an inspection and issue a compliance declaration.
• Internal regulation: Accommodation may only be used following full approval and the preparation of an internal regulation governing its use, which must be accepted by employees.
• Security deposit: For provisional and adapted buildings, the entity carrying out these temporary accommodation works must provide a security deposit to the site owner to safeguard the site’s integrity. The deposit will be held until the site has been restored to its original state. However, it may be partially released upon issuance of a compliance declaration. Under Decree-Law 123/2025, the deposit may be substituted with a performance and dismantling insurance policy or a declaration undertaking joint and several liability issued from a banking entity subject to European Union Member State supervision requirements.

Impact on works contract timelines

The accommodation cannot be occupied until the plan is fully approved and the internal regulations are accepted by employees. Consequently, the works contract timelines only begin counting once accommodation use is permitted.

Temporary accommodation is subject to a continuous supervision and checks system to ensure compliance with Decree-Law 123/2025, as well as the forthcoming ordinance and plan, the correct operation of the facilities, and the expedited correction of non-compliance.

Regular inspections must be conducted by a senior occupational safety officer and verified by the project’s safety coordinator. Also, the safety coordinator and the executing entity must conduct internal audits every six months. External audits by certified entities will be conducted as mandated by law or upon request from pertinent authorities.

The Portuguese Authority for Working Conditions (“ACT”) monitors working conditions, hygiene, and health and safety within these accommodations. ACT can initiate administrative offense procedures and mandate corrective actions when non-compliances pose risks. Also, other entities maintain their authority to uphold and restore urban development legality. Specifically, they may require the land to be returned to its original condition if the facility breaches the applicable regime.

The new regime seeks to expedite the establishment of temporary accommodation, particularly modular structures and adapted buildings, by waiving prior urban development checks. However, this simplification comes with substantial obligations in terms of planning, maintenance, inspection, auditing, cost accountability, and ensuring robust safety, health and privacy safeguards.

The impact is twofold:

(i)          It facilitates accommodation solutions without requiring prior urban development checks.

(ii)         It imposes strict governance requirements for the accommodation lifecycle, including making well-founded decisions on accommodation type; implementing robust planning and projects; managing documentation such as declarations, reports and records; providing a security deposit; and overseeing site restoration.

Considering the penalties specified in this decree-law, the following practical recommendations should be addressed from the outset:

• Evaluate existing or planned accommodation: Analyze operations with existing accommodation to ensure compliance with the adaptation requirement within the 12-month timeframe. Develop plan models, internal regulations, and frameworks for inspections and audits.
• Map adaptable assets: Identify adaptable assets or modular solutions near construction sites.
• Review works contract risks: Assess potential impact of these requirements on contract timeframes and deadlines. Specifically, consider negotiating terms as necessary to maintain contractual balance in light of these new obligations.
• Ensure compliance with technical requirements: Create a checklist and program related to the obligations arising from the decree-law and monitor upcoming technical requirements that will be established through an ordinance.

Address labor impacts:

• Analyze collective bargaining agreements (“CBAs”). The decree-law supersedes CBAs unless they offer favorable terms for employees.
• Manage mandatory employee training, negotiate written agreements with employees, address any salary issues that arise if temporary accommodation is provided, and fulfill reporting obligations to the ACT.