The Spanish labour market is highly controlled and favours staff, making navigating difficult. Employers must adhere to several statutory rules, making compliance time-consuming and expensive. However, the recent global economic downturn has prompted Spanish lawmakers to embrace political, social, and legal reform to improve flexibility in the Spanish job market.
Key Factors to Consider When Employing in Spain
Regarding employment in Spain, there are several things to think about. Here are some key factors:
1. Contracts:
In Spain, an employment contract must be in writing and signed by both the employer and employee. The contract should include critical information such as job duties, salary, and the length of the employment agreement.
2. Probation Periods:
According to Spanish law, the probationary period cannot exceed six months for fixed-term contracts and three months for indefinite contracts. Employers must notify employees of their probationary status in writing within two weeks of their start date.
3. Termination Procedures:
In Spain, an employer can only terminate an employee for just cause. Some examples of reasonable causes include serious misconduct, chronic absenteeism, or not having the necessary qualifications for the job. If an employer wants to terminate an employee without cause, they must follow a specific procedure.
4. Statutory Leave
Working hours
The Spanish labour law regulates working hours in Spain, stipulating that the maximum working week is 40 hours. Employees are entitled to at least four weeks of paid vacation per year.
Overtime
Overtime is only allowed in exceptional circumstances and must be authorized by the Ministry of Labour. It must be compensated at 1.5 times the employee’s regular hourly wage.
Annual leave
Employees in Spain are entitled to at least 30 days of paid annual leave.
Sick leave
If employed for at least six months, employees in Spain are entitled to paid sick leave.
Public holidays
There are 11 public holidays in Spain.
Maternity/paternity leave
Parents in Spain are entitled to up to 16 weeks of paid maternity leave and four weeks of paid paternity leave.
Other leave
Workers may be eligible for a reduction in their working hours in certain circumstances, such as when caring for children under the age of 12 or family members who are unable to care for themselves during the hospitalization and continuing treatment of a child with cancer or any other serious illness that necessitates lengthy hospital stay and constant attention.
Workers are also entitled to paid vacation in certain circumstances, such as marriage, fulfilling union responsibilities, unavoidable public or personal duties, nursing, the birth of children, moving your primary residence, effective medical treatment, or accident hospitalization.
5. Pensions and Benefits
In Spain, the pension system is pay-as-you-go. This means that current workers contribute to the pensions of retirees. The pension system is funded by worker contributions, government contributions, and capital markets.
The retirement age in Spain is 65 for men and women. Employees are entitled to a state pension if they have worked for at least 15 years.
Employees in Spain are also entitled to other benefits, such as health insurance and unemployment insurance.
Taxes
Income tax in Spain is progressive, with rates ranging from 18% to 45%. Social security contributions are also deducted from an employee’s wages.
Employers must withhold taxes from their employee’s wages and pay them to the Spanish Tax Agency.
In general, employers are required to withhold the following taxes from their employee’s wages:
- Income tax
- Social security contributions
- Local taxes
Employers are also responsible for paying employers social security contributions.
Healthcare
All residents of Spain are entitled to free public healthcare. Residents can also choose to purchase private health insurance.
To be eligible for public healthcare, residents must register with the Spanish national health system (Sistema Nacional de Salud). Residents can present their residency card and passport at their local health center.
Private health insurance is not mandatory in Spain, but it can provide coverage for services not covered by the public healthcare system, such as dental care and private hospital rooms.
Private health insurance is typically more expensive than public health insurance.
Cost of hiring an employee in Spain
The cost of hiring an employee in Spain depends on the employee’s salary and the company’s size.
For example, a company with 50 or fewer employees must pay a monthly social security contribution of €4 for each employee. A company with more than 50 employees must pay a monthly social security contribution of €6 for each employee.
Spain’s income tax rates are progressive, ranging from 18% to 45%.
The employer’s social security contribution is 26.37% of the employee’s salary.
The cost of hiring an employee in Spain is the sum of the employee’s salary, the employer’s social security contribution, and the income tax.
The minimum wage in Spain
Spain has a relatively flexible labour market. Employers can hire and fire employees without much government interference.
The minimum wage in Spain is €900 per month, which is relatively low compared to other developed countries.
Hiring practices in Spain
In Spain, employers can hire employees without a written contract. However, it is recommended that employers have a written agreement in place to protect both the employer and the employee.
The written contract should include the employee’s duties, salary, and start date.
It is also common for employers to require employees to sign a non-compete agreement.
Non-compete agreements are designed to protect the employer’s business interests by preventing the employee from leaving to work for a competitor.
Employers can also require employees to sign a non-disclosure agreement.
Non-disclosure agreements protect the employer’s confidential information, such as trade secrets.
In Spain, there is no limit on the number of hours an employee can work. However, employees must be given at least 24 hours of rest per week.
In Spain, overtime pay is not required by law, but employers may choose to offer it to their employees.
Employees in Spain are entitled to 4 weeks of paid vacation per year.
Employees in Spain are also entitled to 11 public holidays per year.
Maternity leave in Spain is 16 weeks. Paternity leave is 2 weeks.
Employees in Spain are entitled to up to 4 months of unpaid leave for personal or family reasons.
Employees who are fired without cause are entitled to severance pay. The amount of severance pay is based on the length of the employee’s tenure with the company.
Essential tips on how to hire in Spain
- Ensure you have a written contract before the employee starts working. The written contract should include the employee’s duties, salary, and start date.
- Consider requiring employees to sign a non-compete agreement. Non-compete agreements are designed to protect your business interests by preventing the employee from leaving to work for a competitor.
- Consider requiring employees to sign a non-disclosure agreement. Non-disclosure agreements protect your confidential information, such as trade secrets.
- In Spain, there is no limit on the number of hours an employee can work. However, employees must be given at least 24 hours of rest per week.
- Overtime pay is not required by law in Spain, but you may choose to offer it to your employees.
Hiring remote employees in Spain
Many companies are choosing to hire remote employees in Spain. Remote employees are employees who work from home or another location outside of the company’s office.
There are many advantages to hiring remote employees, such as increased flexibility and lower overhead costs.
However, some challenges to hiring remote employees include managing communication and maintaining company culture.
- If you are considering hiring remote employees in Spain, you should keep a few things in mind.
- Make sure you clearly understand the job duties that the remote employee will be responsible for.
- Create a detailed job description and list of expectations.
- Be sure to communicate with the remote employee regularly.
- Make sure you have a system to manage communication and keep track of the remote employee’s progress.
- So, Consider using video conferencing or other tools to help the remote employee feel connected to the company culture.
Outsourcing Employment Through a Recruit Global Talent Service
In addition to hiring remote employees in Spain, outsourcing employment through a recruitment agency is another option. A recruitment agency can help you find the right employees for your company. They will also handle all the paperwork and legalities in Spain hiring employees. Outsourcing employment through a recruitment agency is a good option for companies that do not have the time or resources to find and hire employees independently.- Make sure you understand the fees of outsourcing employment through a recruitment agency.
- Communicate your company’s needs and expectations to the recruitment agency.
- Ask the recruitment agency for a list of potential candidates.
- Interview the candidates and make your final decision.- Be sure to follow up with the recruitment agency to ensure that the process went smoothly and that you are happy with the outcome.
Conclusion
When it comes to finding employees in Spain, there are many options available. You can hire remote employees, outsource employment through a recruitment agency, or find employees independently. Whichever option you choose, be sure to communicate your company’s needs and expectations. With a little effort, you should be able to find the perfect employees for your business.
