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Steps to Understanding Spain Employment Contracts

By April 13, 2017September 27th, 2018No Comments
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Spain employment contracts, just like in any country, are governed by a complex set of rules and requirements. When you’re looking to hire employees in a new country, it can take a lot of work and research to understand the area’s labor laws. Each country has its own set of employment categories, labor protections, required benefits, and cultural nuances.

Here’s a brief introduction into what you need to know to understand the landscape of Spain employment contracts.

International-payroll

Partner with an In-Country Expert

To navigate complicated employment law like Spain’s, you need a local lawyer or in-country partner who’s experienced in writing employment contracts. This might seem like common sense, but many companies have been severely penalized for compliance issues. Many times, these occur when hiring foreign freelancers and not understanding local employment law.

Before moving in-country, find a local lawyer that can guide you through the legal process.

Spain Employment Contracts Defined

Spanish law has two classes of workers: employees and independent contractors.

Employees are considered to offer their services freely in exchange for payment. In other words, there is no fee for service relationship. Independent contractors, however, enter into mutual obligation contracts, meaning that there is an exchange of obligations and contributions to the employment relationship.

Writing Spain Employment Contracts

There are no general requirements for a full, written contract in Spain, except for temporary work of more than four weeks. It’s recommended that employers provide general information in writing before entering a working relationship.

Contracts should include the following information:

  • Company Name
  • Start date
  • Salary
  • Hours
  • Work site
  • Vacation pay
  • Collective agreements
  • Professional group to which the employee belongs

Collective Agreements

Collective bargaining is prevalent in nearly every area of Spain’s public and private sectors. Most companies have some form of collective agreement in place, and they apply to an employment contract regardless of what the contract terms specifically state.

Work Hours & Time Off

Spain has strict restrictions on the number of hours employees can work. With a few exceptions, such as executives and agricultural workers, employees are confined to 40 hour work weeks. In addition, they’re limited to nine hour days and 12 hours of rest before starting the next day’s work.

Workers are also entitled to 1.5 days of uninterrupted break each week, no phone calls or work emails, usually from Saturday afternoon through Sunday or Sunday through Monday morning.

Spanish employees also are entitled to mandated vacation time. Employees who have worked at a company for more than a year get a minimum 30 days of paid vacation in addition to the 14 public holidays a year.

Temporary Workers

Temporary workers have the same rights as full-time employees. These type of contracts are limited to situations including:

  • Workers hired for a specific project that is autonomous within the company
  • Companies in need of short-term workers to meet excessive demand
  • Replacing an employee who will return, such as maternity leave

These contracts may not run for more than 6 months out of the year

Independent Contractors

In general, it can be very risky for international employers to hire foreign independent contractors. One such risk is that your idea of a contractor and Spain’s idea of a contractor are often quite different.

For example, if a contractor decides to sue, the local court may throw out your contract and reclassify the contractor as an employee. Suddenly, the employer is on the hook for taxes, withholding, and other benefits that weren’t a part of the original equation.

If you don’t want to, or can’t, hire a full-time employee, use an employer of record (EOR) service such as International PEO to manage your employment relationships overseas.

This is just a brief introduction to employment contracts in Spain. As stated above, international businesses should seek advice and guidance from a local expert that understands the landscape of labor laws in their target markets. We can help you with this. Give us a call today to learn about our global expansion services!