Country Information

Spain is a southern European country where Spanish and the well-known Catalan are its official languages. Spain is a member of the European Union, and it boasts the fourth-largest economy in the Eurozone. It is estimated that foreign multinationals located in Spain account for more than 50% of the country’s exports. Spain has 47 million people and is economically significant in the Eurozone. It is also known for many international destinations, including the Canary Islands, Mallorca and Ibiza. Madrid is home to the headquarters of numerous international and national companies.

Employment Contracts

Employment contracts in Spain may be verbal or in writing and is presumed to exist where work is performed for an employer, at the employer’s direction, by an individual who is subordinate to the employer and payment is exchanged for the work. Either party to an employment contract can require the agreement to be formalized in writing at any time during the course of the employment relationship. Where the employment relation is more than four weeks, employers must provide employees with information with the main terms of the contract and performance of work in writing. This condition is satisfied if there is a formal written employment contract. The written contract or statement must include:

  • Identity of the employer and employee
  • Start date and duration (if applicable)
  • Where the employee will perform work
  • The category and/or description of the job
  • Salary details including base salary, bonuses and any other periodic payments
  • Working hours and days
  • Holiday details including duration and when they are/can be taken
  • The notice period required to terminate the contract
  • The applicable collective agreement
  • Details on any work to be provided abroad

There are four general types of employment contracts in Spain:

  • Permanent
  • Temporary
  • Training
  • Apprenticeships / Internships

Employees with temporary contracts have the same rights as those with permanent contracts. Employers must inform temporary employees of job vacancies within the company. Changes to the employment contract are allowed. The employer must provide any changes in writing within one month of the change becoming effective. The employee generally must consent and both parties must sign the new agreement. Businesses have 10 days to notify the State Public Employment Service (SEPE), Servicio Pãblico de Empleo Estatal, of all employment contracts executed with employees.

Working Hours

Working hours in Spain are generally set by individual or collective agreement but cannot exceed 40 hours a week on average over a year. In absence of an agreement that details the scheduling of irregular work hours, the employer can allocate a maximum of 10% of the working hours throughout the year. Working hours generally cannot exceed nine hours a day, unless otherwise provided by collective or individual agreement.The maximum amount of overtime allowed is 80 hours per year. Overtime that is offset by rest time (not payment) within four months of its completion is not included in the calculation of annual overtime hours. Overtime performed at night is prohibited except in duly specified and expressly authorized situations.Night-time work is between 10 p.m. and 6 a.m. Employers must inform local labor authorities if night work is performed on a regular basis. Night work may not exceed an average of eight hours a day over a 15-day period. Employees who perform three or more hours of their work at night, or a third of their workday at night, are night workers.

Sick Leave

The maximum duration of sick leave is 12 months (365 days), which can be extended to another six months (180 days). The sick leave is known as Temporary Disability – IT (Incapacidad Temporal). Eligible employees are entitled to benefit payments during leave ranging from no statutory payment provision to 75% of the regulatory base.To be eligible for benefits, employees must have at least 180 days of contributions in the five years before taking sick leave. If the sick leave is related to an accident, there is no minimum qualifying period. Employees also need to have a medical certificate from a doctor’s affiliate on the Public Health System.

Maternity/Paternity Leave

Female employees are entitled to 16 weeks of paid maternity leave for the birth of a child. Maternity leave can be extended for the birth of multiple children up to 18 weeks for the birth of twins and 20 weeks for the birth of triplets. Leave will also be extended by two weeks if the child is disabled. Maternity leave also can be extended for up to 13 weeks if the child requires hospitalization for more than seven days. Fathers are entitled to 16 weeks of paid paternity leave. This leave can be taken simultaneously with maternity leave. Each parent will be entitled to 16 weeks of paid leave related to the adoption or fostering of a child. Eligible employees can receive payments from Spain’s social security scheme while on leave for the birth or adoption of a child. The amount of the payment is 100% of the employee’s regulatory base. The regulatory base is calculated based on the employee’s salary in the month preceding leave.

Compensation

Employees in Spain are entitled to a monthly minimum wage. Salaries may be paid in money and in goods. Salary paid in goods cannot exceed 30% of the employee’s salary or reduce the total amount paid in money to less than the minimum interprofessional salary.Employees are entitled to two statutory extraordinary bonuses a year. One bonus is paid around the Christmas holidays and the other in a month fixed by a collective agreement or by the employer and the employee representative. The amount of the bonuses is generally fixed by collective agreement but not less than the employee’s basic monthly salary of a month.

Vacation Leave

In addition to public holidays, employees are entitled to at least 30 calendar days of paid vacation leave per year. Payment in lieu of annual leave is not allowed. Leave will be decided by mutual agreement between the parties, as indicated in a collective agreement.

Public Holidays
  • New Year’s Day
  • Epiphany
  • Maundy Thursday
  • Good Friday
  • Labor Day
  • Assumption Day
  • Fiesta Nacional de España /National Day of SpainAll Saints’ Day
  • Constitution Day
  • Immaculate Conception
  • Christmas Day
Health Insurance Benefits

In Spain, social Security is mandatory and universal. The entire workforce has to pay social security taxes, which covers all medical needs, including retirements and pensions. The registration may be by the employer, employee or ex officio (by the government). Employers must request the affiliation to the Social Security System of those who are not affiliated and work for them.All workers are eligible for Social Security since it is mandatory. Eligibility depends on the type of benefits, age of the workers, and time of contributions. Some companies supply their employees with private health insurance to improve benefits for their employees.

Employment / Termination / Severance

The rights and obligations of the employer and employee related to the end of the employment relationship generally depend on the type of termination, as well as the terms of the individual or collective agreement. Employment contracts can terminate by mutual agreement, at the end of the contract period (if it is a temporary contract with a fixed term), by the employee, or by the employer either for objective, economic or disciplinary reasons.

Individual and collective agreements can specify under what conditions the employment relationship will terminate. Fixed-term contracts end upon the expiration date agreed to by the parties or on the completion of the service. Employees are entitled to compensation at the end of the fixed-term contract in the amount of 12 days of salary per year of work. If the temporary contract is for a duration of more than one year, the party terminating the contract must provide at least 15 days’ notice of termination.

Employees can terminate an employment relationship by resigning, either voluntarily or by abandoning the job, or for cause. Where an employee terminates the employment relationship for cause, the employee is entitled to compensation equivalent to 33 days of salary per year of service plus “finiquito.” An employer can dismiss an employee for objective reasons listed in the Workers’ Statute, which include employee inaptitude, inability to adapt, collective dismissal or absences from work. Employers must provide the employee with a termination letter stating the reason for the dismissal and the date of the employee’s last day of work.

The employee is entitled to 15 days of notice and compensation, also referred to as an indemnity. The compensation amount is 20 days of salary per year of service, at the time notice is given, up to a maximum of 12 months. Employers also can provide pay in lieu of notice.

Employers can discipline an employee, up to and including dismissal for reasons including repeated unexcused absences, disobedience, physical or verbal abuse directed at the employer or co-worker, or sexual harassment, among others. The dismissal must be within 60 days from when the employer first learns of the conduct and six months from the date the incident occurred. There is no obligation to pay compensation in this case and the employee is not entitled to notice of the termination. However, if the employee is a member of a union, the employer must notify the union.

Local Laws & Regulations

We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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