Employment laws in Spain: What employers must know in 2026

Employment laws in Spain define clear rules for hiring, compensation, working conditions, and employee protection. Employers must comply with key requirements, including the national minimum wage, a standard 40-hour workweek, etc. There is also a provision for mandatory social security contributions shared by both employers and employees.

Employees are entitled to statutory benefits such as annual leave, sick leave, maternity leave, and paternity leave. They also receive benefits under Social Security coverage. These laws are governed by the Spanish Workers’ Statute and Social Security legislation. 

Managing these requirements and navigating compliance with the employment laws in Spain can be complex. An EOR in Spain is not a legal model; you can use a temporary employment agency, like Payoneer Workforce Management, for managing payroll and benefits, while adhering to the labor law requirements in Spain.

Book a demo today to learn more about Payoneer Workforce Management. 

Read on to explore the key employment laws in Spain.

What are the key employment laws in Spain?

Employers in Spain must follow the administered Estatuto de los Trabajadores (Workers’ Statute) by the Ministry of Labor and Social Economy (MITES), on contracts, working hours, statutory benefits, and termination. You must comply with key employment laws and requirements.

Listed below are some primary employment laws in Spain:

• Workers’ Statute (Estatuto de los Trabajadores): This is the primary law that governs all aspects of employment, like hiring, employment contracts, leaves, termination, working hours, employee rights, etc.
• General Social Security Law (Royal Legislative Decree 8/2015): This law regulates Spain’s Social Security system, including employer and employee contributions, healthcare coverage, sickness benefits, parental benefits, unemployment benefits, and retirement pensions. Employers must register employees and make the required Social Security contributions.
• Occupational Risk Prevention Law (Law 31/1995): This law establishes employers’ obligations regarding workplace health and safety. It requires employers to assess workplace risks, implement preventive measures, provide safety training, and protect employees from occupational hazards.
• Organic Law for Effective Equality between Women and Men (Organic Law 3/2007): This law prohibits discrimination based on sex, marital status, nationality, disability, religion, or age. All companies must implement a protocol against sexual and gender-based harassment, and businesses with more than 50 employees are required to have a formal equality plan in place.
• Personal Income Tax Law (Ley del IRPF): This law governs how employee income is taxed in Spain. Employers are responsible for withholding the applicable amount from salaries each month and remitting it to the Spanish Tax Agency on their employees’ behalf.

What are the types of employment contracts in Spain?

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 (Fixed-term): These contracts allow employers to hire workers for a specific period or project. 

What are the essential contract elements in Spain?

Employees in Spain have statutory rights of employment with regard to compensation, hours of work, leave entitlements, safety at the workplace, equal treatment, social security, and protection from unfair dismissal. These are the minimum standards that all employers need to follow, irrespective of the kind of employment agreement. The main elements are outlined below.

• 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

What are the statutory employment rights in Spain?

Employees in Spain are entitled to statutory rights relating to pay, working hours, leave entitlements, workplace safety, equal treatment, social security benefits, etc. Employers must comply with these regardless of the employment contract type. 

When hiring in Spain, employers must be aware of the following statutory employment rights and employment laws in Spain.

Statutory benefits	Details
Working Hours	Maximum 9 hours per day; 40 hours per week
Overtime	Up to 80 hours per year
Public Holidays	14 public holidays annually
Annual Leave	30 calendar days (equivalent to 22 working days)
Minimum Wage	EUR 1,221 per month
Overtime Pay	Typically, 1.75 times the regular hourly rate
Social Security (INSS)	Covers healthcare, unemployment, retirement, disability, maternity, and related benefits
Sick Pay	Unpaid till the 3rd day, paid by the employer from the 4th-15th day.16th day onward, covered by Spain’s Social Security system
Birth and Childcare Leave	19 weeks of paid leave, including 6 mandatory weeks immediately after birth
Annual Bonuses (13th and 14th Salary)	Two additional salary payments per year, or prorated across 12 monthly payments

Know more about leave policy in Spain through our extensive guide on leave policy in Spain.

What are the laws for employment termination in Spain?

In Spain, employers can legally terminate employment based on either disciplinary or objective reasons.

Type of Dismissal	Details
Disciplinary	This is when the employee has done something wrong.  This includes repeated and unjustified absences from work or a deliberate and continuous decline in job performance. You do not need to give any notice for disciplinary dismissals.
Objective	This is when the employer dismisses the employee based on objective grounds, such as an inability to adapt to technical changes in their position, or redundancy caused by factors beyond the employee’s control.  You need to give 15 days’ notice in this case.

What are the examples of reasons for dismissal?

Here is a list of examples for each type.

Disciplinary dismissal

• Repeated and unjustified absences from work or persistent lateness
• Insubordination or refusal to follow lawful instructions
• Verbal or physical offenses against colleagues, managers, or third parties
• Regular drunkenness or intoxication affecting work performance

Objective dismissal

• Continued poor performance despite reasonable support and training
• Redundancy arising from economic, technical, organizational, or production-related reasons
• Other legally recognized objective grounds permitted under Spanish labor law

What is the policy for notice periods in Spain?

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.

What is the policy for severance pay in Spain?

Employees in Spain are generally entitled to severance pay when dismissed for objective reasons, such as economic, technical, organizational, or production-related grounds. In these cases, severance is typically 20 days’ salary per year of service, capped at 12 months’ salary.

Additional rules and compensation amounts may apply depending on the reason for termination and the employee’s circumstances.

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

Have a better understanding of the payroll structure in Spain through our extensive guide on payroll in Spain.

What are the other employee rights and protections in Spain?

The workers in Spain enjoy further benefits, such as being entitled to belong to a trade union, representation at work, and a collective bargaining agreement (CBA). These are some of the major protections that will be discussed in more depth below.

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. 

How can Payoneer Workforce Management help you navigate Spain’s labor laws?

Payoneer Workforce Management assists organizations in adhering to the employment regulations of Spain by providing compliant hiring, payroll services, social security contributions, paid leave, employee benefits, and other local employment-related processes without establishing a local entity. 

This helps organizations minimize compliance risks while managing the workforce in Spain.

Payoneer Workforce Management can assist your business in optimizing its workforce management processes while staying compliant with the Spanish employment rules, such as employment contracts, working hours, leave provisions, collective bargaining agreements (CBA), and termination of employment.

Book a demo today!

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