10 things employers need to know about Spanish labor and employment laws

With the rise of remote work, many companies are looking to hire globally. However, navigating labor and employment laws can be a daunting task for employers. When it comes to hiring in Spain, understanding the nuances of labor regulations is crucial.

Spain is known for having some of the strictest worker protections in the world, with regulations from the European Union, the Spanish Constitution, the Workers’ Statute (Estatuto de los Trabajadores). Collective bargaining agreements are also very common in Spain, and pose additional rules and restrictions.

If you're considering expanding your operations to Spain or are simply aiming to stay compliant as you hire remote employees, this guide will cover the highlights about Spanish employment laws, empowering you to make confident, informed decisions as you tap into the Spanish talent pool.

1. Spain regulates jobs by industry

Each professional category has its own laws around working hours, vacation time, and compensation. Collective bargaining is also extremely common in Spain, and agreements can be made at the workplace, company, industry, regional, or national levels. Even if you’re falling in line with national labor laws, always check to make sure your working conditions are within these more specific standards.

2. Misclassifying employees could cost you millions

The term “falso autónomo” refers to “fake freelancers”—supposedly self-employed contractors who are actually employees in practice. Spain has cracked down on worker misclassification and has imposed huge fines on violators. For example, in 2022, the Spanish delivery app Glovo was fined €79 million for misclassifying more than 10,600 workers in Barcelona and Valencia—then the tech company was fined another €57 million in 2023 for misclassifying over 7,800 couriers in Madrid.

3. Failure to offer benefits will likely result in fines, penalties, and legal consequences

Spanish employees are entitled to statutory benefits, including pension, vacation, public holidays, parental leave, and more. Per collective bargaining agreements, you may be required to offer other benefits too. If employers don’t pay out these benefits because they’re holding out on employees or have misclassified “falso autónomos” in their workforce, they may face lawsuits, fines, back payment (for overtime, vacation days, public holidays, and other benefits), and, depending on the severity of the offense, prison time.

4. Spain has strong anti-discrimination protections

In 2022, Spain enacted a new law for equal treatment and nondiscrimination. This law recognizes the inherent right to equal treatment for all, regardless of nationality, age, racial or ethnic origin, gender, religion, disability status, sexual orientation, gender expression, illness or health condition, language, socioeconomic station, or other personal or social circumstances. Employers can’t discriminate during the job selection process, during employee training, when determining pay, or working conditions.

5. Employers must pay into social security

The typical social security contributions vary by job type, and employers may owe more for high-risk work. However, on average in 2023, employers contributed around 30-32% of their employee’s salary, with a contribution ceiling of just over €3,500 per month. Employees contribute an average of 6.45% of their salary.

6. Spanish workers have some of the most generous vacation entitlements in the world

Full-time workers in Spain get 30 calendar days of paid vacation annually. In addition, they also get 14 days of paid public holidays (a mix of national and local holidays). Should a holiday occur on a weekend, then employees typically take off the following Monday.

7. Non-disclosure agreements (NDAs) are legally binding in Spain—with restrictions

NDAs can be used to protect a company’s trade secrets and other private information from competitors. While Spanish courts often consider NDAs enforceable (the Supreme Court of Spain and Court of Appeal of Barcelona have both protected trade secrets), NDAs must meet requirements for being reasonable and of legitimate business interest. The NDA also needs to be specific in defining what information is confidential and for how long.

8. Spain has strict data protection laws for workers

The EU’s General Data Protection Regulation (GDPR) and Spain’s Data Protection Act protect employees from being unfairly monitored. Employees have a right to privacy when using digital devices and cannot be surveilled by video or geo-location systems. Employers should only collect personal information when necessary, and must also inform employees or involve the workers’ representatives when setting out new criteria for using technology in the workplace.

9. Payments have an unusual cadence

In Spain, salaries are split into 14 installments throughout the year, with pay doubled at Christmas and on a second date (typically in June or July, though the exact date is often decided through collective bargaining). An employer can pay 50% of each allowance before Christmas and the other decided date, with the remainder paid out throughout the other pay periods of the year. Alternatively, the employer can pay the subsidies in full before the holidays.

10. Whistleblowers are protected

Workplace whistleblowers are employees who reveal information about illegal, immoral, fraudulent, or unsafe activity. Even if a worker has signed an NDA, that cannot be used against them if they’re a whistleblower. What’s more, the EU’s Whistleblowing Directive specifically requires employers to have designated reporting channels and protective measures for whistleblowers.

Frequently asked questions about Spanish labor laws

What are the minimum wages in Spain?

Though Spain allows overtime work, employers should tread carefully, as the country is strict about its practice.

Overtime must be voluntary, meaning that employees are allowed to decline working extra hours. The time must be paid according to collective agreements, but legally can’t be less than the ordinary day’s salary and, as a general rule, should be higher. Employers also can’t compensate employees solely with time off. Overtime hours can’t exceed 80 hours/year.

According to Spain’s Workers’ Statute, companies must keep a full record of the working day anytime overtime work is performed.
Whether or not an employee performs overtime work, employers are required to give them at least 1.5 days of continuous rest per week. This time is typically taken on the weekend.

What are the required benefits in Spain?

In Spain, all full-time employees are entitled to:

• Pension
• Vacation entitlements (30 calendar days per year)
• Public holidays (14 holidays per year)

Spain’s social security system (sistema de seguridad social, or INSS) has one of the highest pension rates in the world, but also includes many benefits such as:

• Disability
• Retirement
• Healthcare
• Family allowances
• Unemployment allowances
• Sickness—employers pay 60% of the employee’s typical earnings from day four to 15 of their leave, then 75% from the 16th day onward. After day 16, social security typically reimburses this amount for up to a year.
• Death benefits
• Parental leave (including paternity leave and maternity leave)

Note that, even though social security pays in full or in part for sick leave, disability, and parental leave, employers are also compelled to permit that time off. For example, while social security covers 100% of parental leave, parents are entitled to 16 weeks of leave in Spain. That includes six weeks of initial parental leave which is required after birth, and then 10 weeks which may be taken at will within the first year.

Employees are also permitted to take 15 days of leave for a wedding, one day for moving homes, one day for voting, necessary time for jury duty, two days for the serious illness or death of a relative, and any necessary time for medical appointments.

For more information on mandatory benefits in Spain, read our complete guide.

Can I hire employees on indefinite or temporary contracts?

While Spanish employment contracts are generally indefinite or open-ended, temporary and indefinite contracts are allowed in certain situations.

Contracts for production contingencies may last for six months within a 12-month period. Temporary replacement contracts are allowed as a way to replace workers for a defined period of time, for example, during parental leave.

On a case-by-case basis, Spain also allows for training contracts for universities and training institutes. This includes work-linked training (work-study) lasting between three months and three years, as well as contracts for professional practice, formalized within three years of the end of studying.

Spanish workers may also be on indefinite or fixed-term, part-time contracts for employees who work reduced hours per day or fewer days per week.

How do I terminate employees in Spain?

Employers must think about termination laws before even initiating an employment relationship, as your limits for termination should be clearly outlined in any job offer letter.

You can legally dismiss an employee due to misconduct if:

• They are unable to complete the tasks of the job, unless that’s due to illness, pregnancy, or disability.
• If the business no longer requires their services, for example, in the case of redundancy or collective dismissal during a restructuring.
• There’s cause for disciplinary dismissal.
• The termination is within a probation period, as set out in the employment contract. During this probation period, employers can terminate the contract without notice if they’re unhappy with the worker’s performance.

Disciplinary dismissals may be done at will. However, general dismissals typically require a 30 day notice period, unless a collective bargaining agreement requires additional time. You may also substitute pay in lieu of a full notice period, but only if your employee agrees.

In the case of unfair dismissal, your employee may take you to court for compensation or reinstatement. Reinstatements due to unfair dismissals come into effect immediately after the court ruling.

For layoffs of more than 50 employees, employers are required to provide outplacement plans lasting at least six months, during which time those former employees receive guidance on finding new work. If laid-off employees are aged 55 or older, employers must sign a special agreement with Spanish social security.

Most employees require severance pay, except in the case of disciplinary dismissals. For each year of service, the employee is owed pay equivalent to 20 calendar days of work, with a cap at 12 months of pay. Severance pay may be higher for unfair dismissals. As a general rule, employers should be prepared to pay out in full on the day they give employees written notice.

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Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.