Bridging Borders, Advancing Careers

Spain, with an unemployment rate of 11.7% as of May 2025 – the highest in the European Union – presents both challenges and opportunities for employers. While structural issues such as high youth unemployment and a reliance on temporary contracts continue to shape the labour market, Spain also offers significant potential for growth. Strategic sectors including tourism, renewable energy, digital services, and advanced manufacturing are expanding, attracting both domestic and international investment. For businesses looking to hire, understanding these dynamics is key to tapping into Spain’s diverse talent pool and positioning for long-term success.

Hiring in Spain requires a clear understanding of national employment regulations and sector-specific nuances. Compliance with the Workers’ Statute (Estatuto de los Trabajadores) is mandatory, and Collective Bargaining Agreements (CBAs) often prescribe terms that surpass legal minimums.

Types of Employment Contracts in Spain

In Spain, employment contracts are categorized into several main types, each tailored to different work arrangements and legal requirements:

1. Indefinite (Permanent) Contracts

• No fixed end date; offer the highest job stability and legal protection.
• Available in full-time and part-time formats.
• Serve as the default contract unless a justified temporary need arises.

2. Temporary (Fixed-Term) Contracts

Designed for specific, short-term employment needs:
Production fluctuation contracts

• Valid for up to 6 months in a 12-month period; can be extended to 12 months via a Collective Bargaining Agreement (CBA).
• If such contracts collectively exceed 18 months within a 24-month period, the role is converted to indefinite.

Replacement contracts (“interinidad”)

• Used when temporarily covering for absent employees (e.g., on parental leave).
• Must clearly state the identity of the replaced employee and the reason for their absence.

3. Training & Apprenticeship Contracts

Targeted at young workers to combine education with work:
Alternating training contracts

• Geared toward students (typically aged 16–25).
• Duration: 3 months to 2 years.
• Work time capped at 65% in Year 1 and 85% in Year 2.

Professional practice contracts

• For recent graduates.
• Duration: 6 months to 1 year.
• Pay must meet at least the applicable job category rate—never below the statutory minimum wage.

4. Other Contract Formats

Fixed-Discontinuous Contracts

• Permanent contracts for intermittent work, such as seasonal or on-call roles.
• Employee remains on the payroll but is only active during designated work periods.

Work Experience (“Becarios”) Contracts

• For recent graduates needing professional exposure.
• Duration: usually 6 months to 2 years.
• Must be offered within a specified time post-graduation.

Remote, Payroll, or Secondment Contracts

Cover specialized arrangements:

• Telework under remote work regulations,
• Agency-based employment,
• Assignments to different branches or temporary roles.

What Must Be Included in a Spanish Employment Contract

If the work spans beyond four weeks, Spanish and EU law require a written statement of key terms within two months of starting:

• Identities of both employer and employee
• Start (and, for fixed-term roles, estimated end) date
• Job category, workplace location
• Base salary and any additional compensation
• Working hours and schedule
• Annual leave entitlement
• Termination notice requirements
• Applicable Collective Bargaining Agreement (if any)

1. Working Hours

Spain’s working hours are regulated by the Workers’ Statute and related labour laws to balance productivity with employee well-being.

• Weekly limit: 40 hours/week (annual average under collective agreements)
• Daily limit: 9 hours/day
• Rest: At least 12 consecutive hours between shifts
• Breaks: Minimum 15 minutes after 6 continuous hours
• Young workers: Stricter rules for employees aged 16–18 years
• Flexible distribution: Allowed under collective agreements
• Record keeping: Employers must log start, end, and break times for at least 4 years
• Special sectors: Adaptations for activities such as night or shift work under Royal Decree 1561/1995

A government proposal to reduce the workweek to 37.5 hours without salary cuts is awaiting parliamentary approval.

2. Overtime

Overtime refers to hours worked beyond the legal daily or weekly limits. It is generally voluntary unless specified in a collective agreement.

• Pay/rest: Equal to or higher than regular pay, or equivalent rest within 4 months
• Annual limit: 80 hours/year
• Exceptions: Urgent work to prevent or repair damage is excluded from the limit
• Records: Must be documented daily and shown on the payslip

3. Wages & Minimum Wage

For 2025, the Minimum Interprofessional Wage (SMI) is:

• €1,184 gross/month over 14 payments (€16,576/year)
• Equivalent to about €1,381 gross/month when prorated over 12 months
• Increase: 4.4% compared to 2024

Most employees receive 14 annual payments — 12 monthly salaries plus two extra (commonly in July and December), though some employers spread these across 12 months.

Special rates:

Temporary/seasonal workers (≤ 120 days): €56.08/day
Domestic workers (hourly): €9.26/hour

4. Paid Leave & Rest Days

Weekly rest: At least 1.5 days/week (can be accumulated over 14 days)

Public holidays: 14 days/year, paid and non-recoverable

Personal leave:

• Marriage or civil partnership – 15 days
• Accident/serious illness/hospitalisation/recovery at home of close family – 5 days
• Death of close family – 2 days (4 if travel required)
• Relocation – 1 day
• Public or personal duties, union duties, prenatal/adoption preparations, official restrictions, or organ/tissue donation time

5. Annual Holidays

Employees are entitled to a minimum of 30 calendar days of paid annual leave.
This leave cannot be replaced by cash and must be agreed upon between employer and employee.

6. Temporary Incapacity

This applies when employees cannot work due to illness, injury, or recovery needs, whether work-related or not.
It includes observation periods for suspected occupational diseases and is managed through Spain’s Social Security system.

7. Medical Examinations

Employers must arrange regular health checks based on workplace risks.
These are:

• Free of charge to the employee
• Mandatory when the nature of the job requires
• Intended to monitor health and prevent work-related hazards

1. Vacation & Public Holidays

Employees in Spain are entitled to a minimum of 30 calendar days of paid vacation per year, which usually equals about 22 working days.

In addition, there are 10–14 paid public holidays each year, combining national holidays with those set by each autonomous community and municipality. Local authorities may substitute some national holidays with regional or municipal celebrations.

By law, unused vacation days cannot be exchanged for monetary compensation, except when the employment relationship ends before the leave is taken.

2. Sick Leave (Temporary Incapacity)

Employees unable to work due to illness or injury are entitled to the following statutory benefits:

• Days 1–3: Typically unpaid, unless a collective agreement provides otherwise.
• Days 4–20: Employer pays 60% of the employee’s regulatory salary base.
• From Day 21 onward: Social Security pays 75% of the regulatory base.

Sick leave benefits can last for up to 365 days, with a possible extension of 180 days in exceptional cases. Employers usually cover sick pay until day 15, after which they may recover part of the cost from Social Security.

3. Parental Leave

Both mothers and fathers are entitled to 16 weeks of paid parental leave. The first six weeks must be taken immediately after the birth, while the remaining 10 weeks can be taken in full or in parts anytime within the first year. This leave is fully paid and is designed to promote shared caregiving responsibilities.

1. Social Security Contributions

In Spain, all employers must register with the Tesorería General de la Seguridad Social (TGSS) and make regular contributions to the national social security system, which finances healthcare, pensions, unemployment benefits, and other public programs.

In 2025, standard employer contributions are approximately 30.57% of an employee’s gross salary. Additional charges may apply for work-related accident coverage, depending on the occupational risk level. A solidarity contribution is also required for salaries exceeding the maximum contribution base of about €4,909.50 per month.

Employees contribute 6.48% of their salary, which is withheld by the employer and remitted together with the employer’s contributions. Rates can vary by industry, job risk category, and contract type.

2. Self-Employed Workers (Autónomos)

Self-employed professionals in Spain, known as autónomos, are covered under the Régimen Especial de Trabajadores Autónomos (RETA). They must register with Social Security and pay the full amount of their contributions directly, as there is no employer participation.

Since 2023, contributions for autónomos are based on actual net income, structured into 15 income tiers. Lower earners may pay as little as €230 per month, while higher earners contribute more according to their bracket. New autónomos can benefit from a reduced flat rate, typically between €60 and €80 per month for the first year, with possible extensions in certain cases.

Employment termination in Spain is strictly regulated to ensure fairness and protect employees’ rights. Dismissal can only occur for legally recognised reasons:

• Disciplinary dismissal – For serious breaches of conduct, such as repeated absenteeism, insubordination, or violation of company policies.
• Objective dismissal – For justified business reasons, including economic, technical, organisational, or production-related factors.
• Collective dismissal – When a significant number of employees are dismissed within a 90-day period, usually for restructuring or cost-cutting purposes.

Notice Periods

The amount of notice required depends on the type of termination:

• Disciplinary dismissal – No notice required.
• Objective dismissal – 15 calendar days.
• Resignation by employee – Typically 15 days.
• Senior management roles – Between 3 and 6 months.

Employers may choose to provide pay in lieu of notice.

Severance Payments

The level of severance pay depends on the reason for dismissal and whether it is considered fair:

• Fair objective dismissal or collective redundancy – 20 days’ salary per year of service, up to a maximum of 12 months’ pay.
• Unfair dismissal – 33–45 days’ salary per year of service, capped at 24 months’ pay.
  Fair disciplinary dismissal – No severance is required.
• Unlawful dismissal (e.g., discriminatory or in violation of labour rights) – The employee may be reinstated and entitled to back pay.

Legal Requirements

Employers must follow proper procedures to ensure dismissals are valid.

• Disciplinary dismissals require a written letter clearly explaining the reasons.
• Objective dismissals require notice or payment in lieu, a detailed dismissal letter, and severance.
• Collective dismissals must involve consultation with employee representatives, notification to labour authorities, and individual dismissal notices including severance.

Failure to follow these procedures can result in additional financial liability or the employee being reinstated.

Non-compliance with Spanish labour laws can result in significant consequences for employers. Labour violations are classified according to their severity:

• Minor infringements – Fines ranging from €70 to €750.
• Serious infringements – Fines ranging from €751 to €7,500.
• Very serious infringements – Fines ranging from €7,501 to €225,018.

Fines may increase by up to 50% for repeated violations.

In addition to financial penalties, company directors can face criminal liability for serious violations that cause harm. Non-compliance can also result in reputational damage, affecting a company’s ability to attract talent and maintain strong business relationships in Spain.

Note:
Regional and local holidays also apply and vary depending on the autonomous community, meaning they are subjective and may differ between locations.

Please find our Spain office address below:

Calle de Jorge Juan,
35, Salamanca,
28001 Madrid, Spain

Email: info@linkcompliance.com