Employment laws in Spain

Before hiring in Spain, employers must understand the country’s complex local employment laws. Spain’s labor laws take worker protection very seriously, so knowing exactly which regulations you need to follow is essential if you want to operate seamlessly.

Using Payoneer Workforce Management helps streamline the process of hiring full-time workers and independent contractors, and supports as per employment laws in Spain.

Key employment laws in Spain

In Spain, labor laws are covered in the Workers’ Statute, known as the Estatuto de los Trabajadores. This is the primary regulation that defines the duties and obligations of employers and employees alike. The Labor Guide (Guía Laboral) provides further information on Spain’s employment laws.

It’s important to note that Spain regulates jobs by industry. Each professional category may have its own laws regarding working hours, paid time off, and compensation. 

Collective bargaining is also common, and agreements can be made at a workplace, company, industry, regional, or national level. So, even if you’re compliant with national labor laws, always check that your working conditions align with these more specific standards.

Contract employment laws in Spain

In Spain, employees must be classified correctly. The country has recently cracked down on worker misclassification, for example, “falso autónomo” or “fake freelancers”, and issued large fines to violators. As such, it’s essential to have strong contracts in place to protect both employees and employers.

Contract types

Here’s a rundown of the main types of employment contracts in Spain.

• Indefinite contract: This is an open-ended contract that doesn’t place a time limit on the provision of services. The contract can be oral or written (but should be written in the case of long-term employment).
• Temporary contracts: These contracts allow employers to hire workers for a specific period or project. 

Essential contract elements

According to Spain’s labor laws, employment contracts can either be written or verbal. However, to avoid any uncertainty and ensure clarity for both parties, a written contract is highly recommended. 

These are the elements to include in Spanish employment contracts:

• The employee’s full name and address
• Job title and description
• Contract type (e.g., fixed-term or permanent)
• Start date (and end date if the contract is fixed-term)
• Agreed salary and any additional compensation
• Benefit entitlements
• Typical working hours
• Details of the probationary period
• Termination rules and processes
• Employee’s statutory rights

Statutory employment rights in Spain

When employing full-time workers, employers must be aware of the following statutory employment rights and employment laws in Spain.

Working hours

While these may vary slightly depending on the professional category, here’s a general breakdown.

• A workday in Spain is a maximum of 9 hours, with a maximum of 40 working hours per week.
• Overtime is considered anything that exceeds normal working hours, up to a maximum of 80 hours per year.

There are 14 public holidays in Spain. Full-time employees have access to 30 calendar days of paid leave annually (including weekends), which is equivalent to 22 working days of paid time off.

You can read more about the leave policy in Spain here.

Minimum wage and overtime

Spain’s current minimum wage is EUR 1,381.33 per month. 

Employees are entitled to at least the same pay as normal working hours for any overtime worked.

Please note: The minimum wage is frequently reviewed and adjusted by state governments based on the inflation rate and cost of living, so it’s vital to stay up to date on the latest minimum wage rates to ensure your business stays compliant.

Mandatory benefits

Under Spain’s labor laws, employees are entitled to the following statutory benefits:

• Social security (INSS): This covers healthcare, unemployment, retirement, temporary or permanent disability, maternity leave, and more. 
• Sick pay: This covers common illnesses or non-work-related injuries from the 4th day of leave, as well as occupational diseases or work-related injuries.
• Birth and childcare leave: The parents are entitled to a total paid leave period of 19 weeks, consisting of 6 mandatory weeks directly after the child’s birth.
• Annual bonuses: All employees are entitled to 2 annual bonuses, known as 13th- and 14th-month pay, equivalent to their normal monthly salary and taxed in the same way. Companies can choose to pay their employees in 14 yearly instalments or prorate the bonuses across 12 monthly payments.

Employment termination in Spain

As a U.S. employer, it’s important to understand the termination regulations, as Spain vs. U.S. labor laws offer stronger employee protections around job security and dismissal. 

In Spain, labor laws dictate that an employee’s contract may be terminated on disciplinary grounds, when the employee has done something wrong, or on objective grounds. Here’s a quick guide to how it works.

Reasons for dismissal

According to employment laws in Spain, disciplinary dismissals must be based on gross misconduct, defined as a significant and intentional breach of employment duties. Reasons for disciplinary dismissal include:

• Repeated and unjustified absences from work or lack of punctuality
• Insubordination and disobedience
• Verbal or physical offences
• Regular drunkenness or intoxication

On the other hand, employees may be dismissed for objective reasons, which could include:

• Continued poor performance despite support and training
• Redundancy due to economic, technical, organizational, or production-related reasons

Notice periods

In the case of disciplinary dismissal, no notice period is required. Employees must be given 15 calendar days’ notice for dismissals for objective reasons. This works both ways, with employees typically required to give 15 days’ notice when resigning. Exceptions include “resignation with just cause”, usually where the employer has breached the contract, or dismissal or resignation during the probationary period.

Severance pay

According to Spain’s labor laws, employees must receive severance pay if they are dismissed due to economic, technical, organizational, or production-related reasons. This equates to 20 days of wages for every year they have worked for the company, with a cap of 12 months’ salary.

Also, for unfair dismissal, the compensation is set at 33 days per year, capped at 24 months.

Other employee rights and protections

Before bringing on employees or contractors, it’s worth noting some other rights and protections that employees enjoy under employment laws in Spain.

Union representation

Employees can unionize if they wish to do so, and employers cannot prevent employees from joining a union. The main unions in Spain are the Confederación Sindical de Comisiones Obreras (CCOO) and the Unión General de Trabajadoras y Trabajadores (UGT).

CBAs

Collective bargaining agreements are very common in Spain and play a major role in regulating labor relationships between employers and employees. They are negotiated between trade unions and employers’ associations. They set out the terms and conditions of employment in a given industry or sector. All companies have legally binding CBAs that apply to them and all employees, regardless of union membership. 

Navigate Spain’s labor laws with trusted support

Before taking on employees or contractors, it’s essential to familiarize yourself with Spain’s labor laws, which can be complex and differ significantly from, say, U.S. labor laws. Non-compliance can result in hefty fines for employers.

That’s where Payoneer Workforce Management comes in, assisting with onboarding, payroll, taxes, and more with compliance support as per Spain’s employment law. 

Book a demo today.

FAQs

1) What are the employment laws in Spain?

Spain’s employment laws are set out in the Workers’ Statute (Estatuto de los Trabajadores), which protects employee rights and defines the minimum standards for employment contracts. Collective agreements, negotiated at the workplace, company, industry, regional, or national levels, often add further requirements, so compliance must go beyond national law.

2) What are the labor rights in Spain?

Spain’s labor laws offer employees robust statutory protections. These include social security coverage for healthcare, unemployment, disability, sick leave (paid from the 4th day onwards), and equal, fully paid parental leave of 19 weeks for both parents.