Spain is the fourth-largest economy in the eurozone, making it an attractive option for U.S. businesses looking to expand their international workforce. But hiring talent in a new country can be challenging, especially if you’re unfamiliar with local labor and employment laws. 

Typically, companies use an Employer of Record (EOR) to onboard talent in a new country without setting up a local entity; however, this model may not be applicable in Spain. 

So businesses may use a workforce management platform like Payoneer Workforce Management for support with compliantly engaging local talent.

This guide explains how to hire employees in Spain, what legal considerations employers need to follow, and how a workforce management platform helps simplify the recruitment process for U.S. companies hiring in Spain.

Hiring employees in Spain: Options for U.S. companies

American companies hiring in Spain can choose from three pathways: setting up a legal entity in Spain, hiring contractors, or using a workforce management platform.

1) Set up a legal entity in Spain

The first option is to register your business and set up a legal entity in Spain. This allows you to hire employees in Spain directly. You’ll then be responsible for managing taxes, benefits schemes, payroll, and more.

This hiring method is best for businesses that are already well-established and looking to expand extensively into Spain. However, registering your business abroad can be expensive and time-consuming, so it may not be the best option for companies looking for fast and flexible solutions.

2) Hire contractors in Spain

Working with independent contractors is a good alternative to hiring employees in Spain. This option offers a great deal of flexibility, making it ideal for limited-scope projects.

But if you decide to hire contractors in Spain, you need to be careful not to misclassify them. If your contractor works more like an employee, your company risks employee misclassification fines and penalties.

3) Use a workforce management platform

It is a third-party entity that acts as the legal employer for talent based in Spain. This means they support the recruitment process, including onboarding employees, managing payroll and taxes, and local labor compliance. 

Payoneer Workforce Management offers a flexible and efficient solution for American companies hiring in Spain.

Here’s everything you need to know about using a workforce management platform in Spain.

Where to find employees in Spain

There are several ways to find top remote talent in Spain. Here are some of the most popular and effective methods.

Popular job boards in Spain

Some of the best places to recruit and hire employees in Spain include:

• LinkedIn: LinkedIn is one of the best platforms for employers looking to hire skilled professionals. You can post one free job advert at a time.
• Indeed Spain: A great platform to recruit entry and mid-level roles, you can advertise jobs for free or run paid ads.
• InfoJobs: InfoJobs is one of the most popular job websites in Spain. It’s a good platform for a wide range of industries and provides access to a large candidate database.
• Tecnoempleo: Tecnoempleo is a specialized job board in Spain designed for technology and IT roles. It’s one of the best places to find top tech talent in Spain.
• Trabajos.com: Trabajos is known for its database of blue-collar roles, but it’s particularly good for employers recruiting in the construction, manufacturing, or logistics industries.
• Empléate: Empléate is a job platform run by the Spanish government. Employers can advertise roles on this site for free, and it’s a great way to reach job seekers with a wide range of skills.

Work with local recruitment agencies

You may choose to work with a local recruitment agency when hiring in Spain. 

They make hiring employees in Spain easy by helping you source top talent effectively and quickly. A good recruitment agency can narrow down potential candidates against your role requirements, which saves you time and effort. They also minimize the risk of potential language barriers when hiring abroad.

If you choose to use a recruitment agency to hire employees in Spain, keep in mind that this will incur additional costs.

Recruit with the support of a workforce management platform

If the thought of hiring in Spain is daunting, a workforce management platform like Payoneer Workforce Management may be a helpful solution. They help you handle the more complex side of recruitment in Spain. They support the onboarding process, from employment contract to payroll and benefits schemes set up, and will help you to stay compliant with local labor and employment laws.

Onboarding employees in Spain

Here are some key steps to follow when onboarding an employee in Spain.

1. Obtain required documents: You should make sure you’ve gathered all necessary documents from your new hire in Spain, including copies of any educational certificates required for the role.
2. Set up payroll, benefits, and leave systems: Employers should set up new employees on payroll, benefits, and leave systems as soon as possible. Be sure to comply with local Spanish labor laws and pay employees in the local currency, euros.
3. Share cultural tips: Send your new employee a welcome email on their first day. This is a great opportunity to introduce the team and share tips on your company culture.
4. Share bilingual materials and training: Spain is considered a multilingual country, so training materials should be provided in both English and Spanish.

Key employment laws and requirements in Spain

When you hire employees in Spain, you must comply with key employment laws and requirements. Here are some of your legal obligations as an employer in Spain.

Employment contracts

All employment contracts in Spain must include:

• 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 probation period
• Termination rules and processes
• Employee’s statutory rights

Employee benefits

All employees living and working in Spain are entitled to periods of paid leave. These include vacation leave, parental leave, sick leave, and more.

Below are the key leave policies that all employers must comply with when they hire in Spain.

• Public holidays: Spain observes 14 paid public holidays per year.
• Vacation leave: Employees in Spain are entitled to at least 30 calendar days of vacation per year. This equates to 22 working days.
• Parental leave: New parents get 19 weeks of paid leave at 100% of their normal wage.
• Sick leave: If Spanish employees are unable to work for more than 3 days, their employer pays them 60% of their normal wage. If they are still unwell after 20 days, they are entitled to 75% of their normal wage, paid by the Spanish social security system.
• Marriage leave: Employees in Spain are entitled to 15 days of paid leave when they get married.

Working hours and overtime

Employees in Spain shouldn’t work more than 40 hours per week or more than 80 hours of overtime each year. Overtime should also be compensated with additional pay at 1.75 times of hourly rate or rest periods.

Tax obligations

Tax obligations in Spain include income tax, social security, and the professional training fund.

• Income tax: Employers are responsible for withholding between 19% and 47% of their employees’ salaries, depending on their earnings. Spain also has a “solidarity contribution” for annual earnings over EUR 4,909.50 per month. This starts from 0.77% borne by the employer and 0.15% by the employee.
• Social security: Both the employer and employee contribute to the Spanish social security system, providing 30.57% and 6.48% respectively. These contributions go towards state-funded healthcare, pensions, unemployment benefits, maternity and paternity leave, and more.
• Professional training fund: Known locally as the Fundación Estatal para la Formación en el Empleo (FUNDAE), the professional training fund is a government foundation designed to promote training for employment in Spain. Employees contribute 0.1% and employers contribute 0.6%.

Termination and severance

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

• 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.

If you have to make your employee redundant due to economic, technical, organizational, or production-related reasons, they are entitled to severance pay. This equates to 20 days of pay for every year they’ve worked for you, up to a maximum of 12 months’ pay.

Payoneer Workforce Management helps hire employees in Spain

American companies hiring in Spain must understand local labor and employment legislation. This includes complying with tax obligations, working hours, vacation allowances, and employee benefits. 

If you’re planning to hire employees in Spain but need support, Payoneer Workforce Management’s unified platform can help. 

From onboarding new hires quickly and compliantly to running global payroll securely in a few clicks, our platform meets the business needs to hire, pay, and manage a global team. That means you can hire employees in 160+ countries without the time and expense of setting up multiple local entities.

Book a demo today to learn more.

FAQs

1) Can a U.S. company employ someone living in Spain?

Yes, U.S. businesses can legally hire employees in Spain. While the process does come with some challenges, such as compliance with local employment legislation, a workforce management platform like Payoneer Workforce Management can help streamline the process.

2) How do I hire Spanish talent for a U.S. company?

U.S. companies can hire people in Spain via one of three methods: 1) setting up a legal entity in Spain, 2) hiring contractors, or 3) working with a workforce management platform like Payoneer Workforce Management.

3) How can a workforce management platform help U.S. companies hiring in Spain?

A workforce management platform acts as the legal employer of local talent in Spain. It helps handle the complex side of recruitment abroad, including drafting employment contracts, managing taxes and payroll, and helping your company stay compliant with local labor laws.