Your Guide to  Employment law in Spain

Employment in Spain is highly regulated, with the main purpose to protect an employee’s rights. The regulations are complex: jobs are grouped into categories and each category has a different set of regulations, called the Convento colectivo.

It’s important both as an employer or employee to be aware of the different types of work contracts, holiday entitlement, and social security requirements when considering the options of working in Spain.

Hiring employees in Spain

Theconvenios regulate, for example, the legal salary range for each job, hours in a working day, vacation days per year. The following norms, though, generally hold true for employment in Spain:

• A 40-hour week.
• Either 14 payments or 16 1/2 payments annually. (yes, that’s true. If you choose 14 payments, you pay the monthly salary plus two extra payments due by July 10 and December 15
• Vacation of 21 business days for each full year worked
• There are no sick days per se. If an employee gets sick, they should find a doctor to sign a baja confirming that they are unable to work. With a baja, social security then takes over to pay the salary of the employee after a certain period of time
• If you lay off someone, you pay45 days of indemnization for each year that the employee worked for you.
  Note: If you fire someone with sufficient cause, then there is no indemnization payment necessary. However, beware that employment tribunals are common in Spain. In either case, though, you must pay something called a finiquito, which mainly covers any vacation that the employee has not yet taken. Make sure you get this finiquito signed by the employee
• The employee has a right to 15 days (including weekends) for a marriage, 2 days for the birth of a child or the death of a family member, 1 day for home relocation, and 4 months for maternity leave

Employers in Spain: things to watch out for:

• Be aware that salaries are lower in Spain than in northern Europe and the USA
• When making a salary offer to someone in Spain, make sure you quote a gross annual salary (sueldo en bruto) rather than net salary, so you’re not in for an unwelcome surprise
• Companies traditionally avoid giving indefinite contracts (Indefenidos) because of the difficulties in laying off employees and the high compensation packages involved. Consequently, the Spanish mentality is such that receiving an indefinite contract is almost as important as what salary they will actually receive
  You can’t be too careful about employee issues. Spain is not at all a litigious country EXCEPT when it comes to an employee who has been fired

Types of work contracts

Indefinite contracts (Indefenido)

This category includes the normal indefinite contract as well as several types of indefinite contracts with government incentives. The main characteristics of thenormal indefinite contract are:

• In the absence of any other formalized contract type, the contract is presumed to be normal indefinite
• Severance pay for improper dismissal is a maximum of 45 days salary for every year worked, up to a maximum of 42 months equivalent salary
• There are no Social Security subsidies or any other financial incentives

Indefinite contracts with incentives may be used when hiring:

• Workers over 45 who have beenunemployed for at least one year
• Women unemployed for more than a year who have been hired for work in sectors where women have been traditionally under-represented
• Workers between the ages of 30 and 44 who have beenunemployed for more than a year.
• Unemployed workers under 30 years of age. Workers with disabilities

The main characteristics of an indefinite contract with incentives are:

• Severance pay for improper dismissal is 33 days salary for each year worked with a maximum of 24 months equivalent salary
• Subsidies of up to 75% from theemployer’s social security contribution
• Tax benefits

The indefinido contract is like a gilt edged contract in Spain which is why they are becomming increasingly rare – especially in the current financial climate.

An indefinido entitles an employee to all sorts of state rights including healthcare for the whole family – even if only one parent is working. Further, employers cannot fire an employee without going through the proper channels and also making significant compensation relating to the amount of time worked within the company.

Temporary contracts

• Contract for a specific project or service, arranged for the purpose of performing work or providing a service which is temporary but of uncertain duration.
• Casual contract due to production overload or backlog. The maximum duration of this type of contract is six months in any twelve-month period.
• Contract to sit in for employees entitled to return to their job. The duration of this contract is the period during which the absent employee retains the right to return to his or her job.
• Work experience contract. This contract can be arranged with university or junior college graduates or persons with vocational qualifications or recognised equivalent qualifications, provided that not more than four years have elapsed since they completed the related training. The duration is from six months to two years.
• Trainee contract. This type of contract can be arranged with workers aged 16 to 21 who do not have the necessary qualifications to obtain a “work experience contract”. The duration of this contract ranges from six months to two years, although it may be extended to three years by a collective labor agreement.

Transitory employment needs may be met through workers provided by temporary work agencies.

Some Frequently Asked Questions

I would like to have employees in Spain. What is the best way to do so?

There are various alternatives. You can create a Spanish company, then have the company hire employees. This carries a cost though, if your business is just starting or if you only need employees in Spain for a limited time.

Another alternative is to have the prospective employee set up as self-employed (autónomo).

As an employer in Spain, how much will I pay to social security?

This table shows the typical figures:

	Percentage of gross paycheck
Reason for contribution	Employer	Employee	Total
Standard	23,6%	4,7%	28,3%
Unemployment*	6,0%	1,6%	7,6%
Other**	2,0%	0,1%	2,1%
Total	31,6%	6,4%	38,0%

These percentages may be slightly different depending on: the work contract (*), salary guarantee in case of bankruptcy, professional studies; additional amounts based on theemployee’s professional classification(**).

What are the holidays in Spain?

There are national, state, and local holidays to consider and it really adds up. For a complete list, go to Spain’sOfficial Social Security site.

I am a foreigner working in Spain. My company is paying into the Spanish social security system.
Can this be transferred into my native country’s system?

Yes.The amount that you have accumulated in the Spanish system can be transferred to any other EU country and any country that has a treaty with Spain. Again, go to Spain’sSocial Security site, and see “Internacional / Convenios bilaterales” for a list of countries and regulations.

Some content has been kindly supplied by Strong Abogados Specialists in company, property and employment law in Spain.

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