Spain isn't just a top destination for digital nomads and sangria-fueled remote work retreats — it's becoming a strategic talent hub for global companies.
With a highly educated workforce, competitive wages, and an abundance of tech and engineering talent, Spain is attracting startups and scaleups eager to tap into a labor market that's both dynamic and globally minded.
But before you jump straight to hiring employees in Spain, it's critical to understand Spain's complex employment laws. From collective bargaining agreements to probation periods and mandatory bonuses, Spain takes worker protections seriously, and non-compliance can cost you big.
This guide breaks down everything you need to know to hire compliantly in Spain and avoid legal missteps.
Key takeaways:
- Employment termination requires just cause and formal procedures. If you get this wrong, you risk legal claims or forced reinstatement.
- Collective bargaining agreements aren't optional and often override default labor laws, especially regarding wages, hours, and leave entitlements.
- Remote workers are protected under Spanish law, including the right to disconnect, reimbursement for work-from-home expenses, and government-backed healthcare.
Labor Laws in Spain: What You Need to Know
Spanish labor laws are governed by various regulations under the Spanish Constitution and The Workers' Statute (Estatuto de los Trabajadores). This comprehensive legal framework serves as the foundation for employment relationships across the country.
The Workers' Statute includes legislation on workplace safety, gender equality, data protection, remote working, and Social Security. It also governs collective bargaining agreements, which are widespread in Spain and cover rights, obligations, and minimum wages across various professional groups.
Spain has implemented significant labor reforms in recent years, particularly following the 2008 economic crisis, to address challenges in the labor market. These reforms have focused on reducing temporary employment, enhancing worker protections, and modernizing work arrangements, including regulations for remote work.
Who Is covered by the Employment Laws in Spain?
Spanish labor laws apply to all employees working in Spain, regardless of nationality or employer origin. The same legal protections and employer responsibilities apply when hiring a Spanish citizen or a foreign national residing in Spain.
Only independent contractors (autónomos) are exempt, and even they are subject to certain labor protections if classified as "dependent self-employed."
Employment Categories & Types in Spain
Spanish employment laws recognize different employment categories and types of contracts to accommodate various work arrangements. These include:
Indefinite (Permanent) Contracts
These are open-ended contracts with no specified termination date and represent Spain's most common and secure form of employment. They provide employees with significant job stability and protection against dismissal.
Temporary Contracts
Spain allows temporary contracts in specific circumstances, though their use has been increasingly restricted to combat labor market fragmentation:
- Fixed-term contracts: For specific projects or services with a defined timeframe
- Seasonal contracts: For recurring seasonal activities
- Relief contracts: When temporarily replacing workers on leave
- Temporary replacement contracts: For covering positions during absences
Training Contracts
- Apprenticeship contracts: For workers receiving formal training while working
- Internship contracts: For recent graduates gaining professional experience
Part-time Contracts
These contracts are for fewer hours than a typical full-time job, with benefits and rights adjusted to match the reduced schedule.
Employment Contracts & Probation Periods
Spanish law generally presumes employment contracts to be permanent and full-time unless specified otherwise. While contracts may be verbal or written, written contracts are mandatory in some instances, including:
- Fixed-term contracts lasting more than four weeks
- Part-time contracts
- Training contracts
- Remote work arrangements
- Temporary agency work
Employment contracts must include essential information such as:
- Identification of both parties
- Start date and duration (for temporary contracts)
- Work location
- Professional category or job description
- Base salary and other compensation details
- Working hours
- Vacation entitlement
- Notice periods
- Collective bargaining agreement information, if applicable
Probation Periods
Probation periods in Spain allow employers to assess an employee's suitability. During this time, either party can terminate the contract without providing a reason, notice, or compensation.
Probation periods typically range from one to six months, depending on the role and employment agreement.
Working Hours & Wages
Working Hours
Spain's labor laws regulate working hours to ensure a balance between productivity and employee well-being. The current workweek is 40 hours, with a maximum of nine hours per day. However, there's a proposed bill to reduce it to 37.5 hours.
Overtime is limited to 80 hours per year and must be compensated with increased pay or compensatory rest time, as stipulated in the employment contract or applicable collective agreement.
Minimum Wage
The minimum wage in Spain is updated annually to account for inflation and economic conditions. For 2025, the annual Minimum Interprofessional Wage (SMI) is EUR 16,576.
Additional Compensation
A notable feature of the Spanish payroll system is the requirement for 14 annual salary installments — 12 monthly payments plus two extra, typically paid in July and December, commonly referred to as 13th and 14th month payments.
Collective bargaining agreements often establish higher wages and may include additional benefits such as productivity bonuses, transportation allowances, and meal subsidies.
Health & Safety Standards
Health and safety regulations in Spain are governed primarily by the Prevention of Occupational Risks Law (Ley de Prevención de Riesgos Laborales - Law 31/1995), which establishes a comprehensive framework to ensure safe working conditions.
Spanish employers must establish workplace risk prevention policies, conduct hazard assessments, provide safety training, supply protective equipment, and maintain safety documentation.
Companies with 6+ employees require at least one elected safety representative, while those with 50+ must form joint safety committees.
For remote workers, legislation guarantees the right to disconnect, expense reimbursement, and equal treatment with on-site staff.
Enforcement and Penalties
The Labor and Social Security Inspectorate monitors compliance with health and safety regulations. Companies found in breach of these laws can face substantial penalties, with fines up to EUR 983,736 for serious occupational risk violations.
Employer Taxes
Employers in Spain must register with the Spanish Social Security system (Tesorería General de la Seguridad Social or TGSS) and make contributions on behalf of their employees. These contributions fund various social programs, including healthcare, pensions, and unemployment benefits.
Social Security Contributions
For 2025, the typical employer contributions amount to approximately 30-32% of the employee's salary, with the following breakdown:
- General contingencies: 23.6%
- Unemployment: 5.5% for permanent contracts, 6.7% for fixed-term contracts
- Wage guarantee fund: 0.2%
- Professional training: 0.6%
These percentages may vary depending on the industry, risk category, and contract type. There is also a contribution ceiling of approximately EUR 4,909.50 per month.
Employees contribute around 6.48% of their salary to Social Security, which employers must withhold and remit along with their contributions.
Self-Employed Workers
Self-employed individuals (autónomos) fall under a special scheme and are responsible for paying all their Social Security contributions themselves. They must register with the Special Regime for Self-Employed Workers (Régimen Especial de Trabajadores Autónomos or RETA).
Termination Guidelines & Severance Pay
Spain has strict regulations governing termination. Employees can only be dismissed for specific legally recognized circumstances, including:
- Disciplinary: For misconduct like absenteeism, insubordination, or breach of faith
- Objective: For economic, technical, organizational, or production-related reasons
- Collective: Affecting a significant portion of the workforce within 90 days
Notice periods vary by termination type:
- Disciplinary dismissals: None
- Objective dismissals: 15 calendar days
- Employee resignation: Generally 15 days
- Senior management: 3-6 months
Employers may substitute notice with equivalent payment.
Severance pay depends on dismissal type and fairness:
- Fair objective dismissal/collective redundancy: 20 days' salary per year worked, capped at 12 months
- Unfair dismissal: 33-45 days' salary per year worked, capped at 24 months
- Fair disciplinary dismissal: No severance required
- Void dismissal (discriminatory/violating rights): Reinstatement with back pay
Proper termination procedures are essential. For disciplinary dismissals, employers must provide a detailed written dismissal letter. For objective dismissals, they must give 15 days' notice (or payment), a detailed dismissal letter, and severance pay.
Collective dismissals require consultation with employee representatives, notification to labor authorities, and individual dismissal notices with severance. Failure to follow these procedures can result in higher costs or mandatory reinstatement.
Health Insurance
In Spain, healthcare is provided through the public Sistema Nacional de Salud (SNS), a universal healthcare system funded by Social Security contributions that guarantees access to medical services for all residents who contribute to the system.
However, many companies offer private health insurance as an additional benefit. If hiring through RemoFirst, you can provide health coverage through RemoHealth or RemoHealth Local for more comprehensive care.
Paid Leave Laws
Spain has several mandatory paid leave laws that employers must follow.
Vacation and Holiday Leave
Spanish workers are entitled to:
- Annual leave: 22 working days (30 calendar days) per year, minimum
- Public holidays: 10-14 days per year, including both national and regional holidays
The number of public holidays can vary by region, as autonomous communities can replace certain national holidays with local celebrations.
Vacation days cannot be cashed out except when employment ends before the employee has taken their accrued paid leave.
Sick Leave
In Spain, employees who are temporarily unable to work due to illness or injury are entitled to sick leave benefits:
- Short-term illness: The first three days are typically unpaid unless otherwise specified in a collective agreement
- Days 4-20: The employer pays 60% of the employee's salary
- Day 21 onward: Social Security pays 75% of the employee's salary
To take paid sick leave, employees must provide a medical certificate. Employees are entitled to sick leave for one year, with possible extensions of up to 180 additional days.
Parental Leave
Spain has progressively expanded parental leave rights. Mothers and fathers are entitled to 16 weeks of paid maternity leave and paternity leave. The first six weeks immediately after the child's birth are mandatory , while the remaining 10 weeks can be used any time within the first year post-birth.
Spanish Independent Contractors
Spain distinguishes clearly between employees and independent contractors (autónomos), with significant differences in rights, obligations, and tax treatment.
Classification Criteria
To be considered a genuine independent contractor in Spain, the worker must:
- Provide services outside the organization and direction of another person
- Have autonomy in determining their work schedule and methods
- Use their own equipment and resources
- Typically work for multiple clients
- Bear their own business risk
- Register as self-employed with the tax authorities
Dependent Self-Employed Workers
Under Spanish law, there exists a sub-category of workers called "dependent self-employed" or "TRADE" (Trabajador Autónomo Económicamente Dependiente). This refers to an independent contractor who earns 75% or more of their income from one company or client.
These self-employed individuals are entitled to additional benefits from their primary client, including paid leave, severance pay, and other protections that bridge the gap between traditional contractors and employees.
Misclassification Risks
Spain has been aggressively cracking down on misclassifying employees as "fake freelancers" (falso autónomo). Notable cases include the food delivery company Glovo, which was fined EUR 79 million in 2022 and an additional EUR 57 million in 2023 for misclassifying couriers.
Non-compliance with proper worker classification carries steep consequences, including administrative sanctions of 100-150% of unpaid Social Security contributions, fines ranging from EUR 70 to EUR 225,018 (depending on violation severity), retroactive payment of all employee benefits, and potential liability for unpaid taxes.
Penalties for Not Following Spanish Labor Laws
Non-compliance with Spanish labor laws can result in severe consequences for employers. Labor violations are classified as minor (EUR 70-750), serious (EUR 751-7,500), or very serious (EUR 7,501-225,018), with penalties potentially increasing by 50% for repeated violations.
In extreme cases, company directors may face criminal liability for serious violations resulting in harm. Beyond financial penalties, non-compliance can result in significant reputational damage, affecting a company's ability to attract talent and maintain business relationships in Spain.
How to Stay Compliant When Hiring in Spain
Companies seeking to expand their hiring to Spain have two main options to maintain compliance with local labor laws while managing their workforce: opening a legal entity or partnering with an Employer of Record.
Establish a Legal Entity
Opening a legal entity in Spain allows companies to employ workers while maintaining full control over operations. However, this approach:
- Requires significant investment in time and resources
- Involves complex registration procedures and ongoing compliance obligations
- Necessitates in-depth knowledge of Spanish labor laws and business regulations
- May take several months to a year (or more!) to establish
Partner with an Employer of Record (EOR)
Using an Employer of Record like RemoFirst offers a more streamlined approach to hiring in Spain without establishing a legal entity. The EOR becomes the legal Employer of Record for your Spanish workers and:
- Handles all compliance aspects, including contracts, payroll, and tax filings
- Manages mandatory benefits and Social Security contributions
- Ensures adherence to termination procedures and severance requirements
- Provides expert guidance on Spanish employment regulations
You retain day-to-day management of your employees, while the EOR ensures legal protection in Spain and any other countries you choose to hire in.
Hire in Spain with RemoFirst
If you're ready to expand globally through international hiring, RemoFirst can help you navigate the complexities of Spanish labor laws and confidently build your team.
RemoFirst offers:
- Compliant employment in 185+ countries, including Spain
- Contractor management and payments in 150+ countries, including Spain
- Comprehensive understanding of Spanish employment regulations
- Expert handling of payroll, benefits, and tax compliance
- Legal protection against misclassification risks
Our all-in-one platform enables you to easily hire, onboard, and pay your Spanish team members while ensuring full compliance with local laws.
Book a demo today to see how RemoFirst can help you employ the best talent in Spain and beyond.
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