1,200+ employees managed monthly — zero labour fines in 5 years, inspection-ready

People services (HR outsourcing) in Spain encompasses the full employment lifecycle administration for companies: payroll preparation, Social Security registrations and deregistrations via the Sistema RED, monthly contribution filings through Siltra, employment contract drafting under the applicable collective agreement, dismissal settlement calculations, and maintenance of mandatory employment records including working-time registers (required under Royal Decree-Law 8/2019) and equality plans (mandatory for companies with 50 or more employees under Royal Decree 901/2020). Labour inspection activity (ITSS) has significantly increased since 2020, with sanctions per infringement ranging from EUR 626 to EUR 6,250 for violations of working-time register, equality plan, and temporary contract rules.

Our people services team acts as an extension of your HR department. We make sure every employee receives an accurate, timely payslip while your company stays in full compliance with employment and social security obligations.

The hidden cost of HR non-compliance for growing companies

HR management in a company of 10 to 100 employees accumulates more technical complexity than it appears: different contract types and working-time arrangements, multiple collective agreements if the company operates across sectors, sick leave, maternity, and paternity management with mutual insurer coordination, mandatory working-time register since 2019, mandatory harassment protocols and pay gap register, and continuous updates for minimum wage increases and collective agreement salary reviews. An administrator without specialist employment law training commits errors that compound: incorrect IRPF withholding calculations that generate an incorrect Modelo 190, sick leave certificates submitted late to the mutual insurer, or working-time registers not maintained — which in a labour inspection generate sanctions of between EUR 626 and EUR 6,250 per infringement.

Payroll and employment compliance is an area where small errors accumulate into significant regulatory exposure. Contracts that do not align with the applicable collective agreement, working-time registers that are incomplete or non-existent, social security deregistrations filed late, or equality plans required by law but not implemented — each is a manageable problem individually, but together they create a vulnerability that becomes costly during a labour inspection, a dismissal dispute, or an employment law audit.

Our people services methodology

We manage the complete employment lifecycle: contract drafting and registration, monthly payroll calculation and payslip issuance, social security filings via SILTRA, sick leave and incapacity management with mutual insurers, and termination settlement calculation. We apply the applicable collective agreements by sector, category, and geography, and update the system automatically when wage reviews or regulatory changes take effect. We maintain working-time registers, prepare and register equality plans, and keep risk prevention documentation current — so the company passes any labour inspection without preparation.

The equality plan obligation applies to all companies with 50 or more employees under Royal Decree 901/2020. Labour inspection (ITSS) has significantly increased inspection activity on equality plans, working-time registers, and temporary contract compliance since 2020. Our team manages that process from start to finish, including the diagnosis, negotiation with the legal workforce representatives, and registration with the competent labour authority.

For companies with international hiring needs, we coordinate with our immigration team to manage work permit applications in parallel with the employment onboarding process. For more specialised payroll management with expatriates, split payroll, and Beckham Law, our payroll services cover that additional layer of complexity.

What our people services include

The service covers monthly payroll calculation applying the collective agreement and individualised IRPF withholdings, TGSS registrations and deregistrations via Sistema RED, monthly TC1/TC2 social security submission via Siltra, Modelo 111 monthly and Modelo 190 annual with the AEAT, employment contracts adapted to each modality, dismissal settlement and indemnification calculations, employee portal for digital payslip signature and leave management, flexible remuneration and employee benefits plans, and for companies with the obligation, preparation and registration of the equality plan and harassment protocol.

Real results in people management

Zero labour compliance fines in five years of service across our entire active client base. The reduction in time the management or administrative team spends on HR management is 80 to 100% from the first month. For a company of 20 employees, this is equivalent to between 12 and 20 hours per month recovered for higher-value activities. Labour inspections our clients have faced in the past five years have all concluded without infringement notices. And the employee portal reduces HR queries on payslips and withholdings by more than 70%.

Frequently asked questions about HR and people services

For growing companies developing compensation structures to attract senior talent, we design salary bands, flexible remuneration plans, and share option schemes that are tax-efficient for both employer and employee. When a company reaches 50 employees, the equality plan obligation becomes mandatory and non-compliance generates significant sanctions. Our team manages the full process, coordinating with workforce representatives to ensure the plan meets both legal requirements and the company’s culture. For companies that also want to manage working conditions and dismissal disputes, our employment law service provides the legal expertise that complements the HR administration service.

People services in Spain: the employment law context

People services in Spain operate within one of Europe’s most extensive employment law frameworks — the Estatuto de los Trabajadores (ET), the multiple sectoral collective agreements (convenios colectivos), and a growing body of equality, data protection, and anti-discrimination legislation. For employers, navigating this framework — correctly classifying employment relationships, applying the right collective agreement, managing dismissals lawfully, and maintaining the required documentation — is a significant ongoing compliance obligation.

The principal labour law reforms of recent years — the 2021 labour reform (RDL 32/2021) restoring sectoral collective bargaining primacy, the 2022 Riders Law extending employee status to platform workers, the 2023 requirements for transparency in remuneration (Ley Paritaria), and the ongoing implementation of mandatory equality plans — have substantially increased the compliance demands on Spanish employers of all sizes.

Employment contracts and collective agreements

The foundation of the employment relationship in Spain is the employment contract, governed by the ET and the applicable sectoral collective agreement (convenio colectivo de aplicación). Key compliance obligations include:

Contract registration (SEPE/CONTRAT@): all employment contracts must be registered with the Public Employment Service (SEPE) within 10 days of commencement through the CONTRAT@ electronic system.

Collective agreement identification: the applicable convenio colectivo is determined by the sector (CNAE code) and, in some cases, the autonomous community. Applying the wrong collective agreement is a common compliance error that can result in underpayment claims and sanctions.

Probationary periods: maximum probationary periods are set by the applicable collective agreement (or ET defaults) and vary by category. During the probationary period, either party may terminate without cause — after the probationary period, specific procedural requirements apply for all dismissals.

Working time and overtime: the maximum annual working time is 1,826 hours (or as modified by the applicable convenio). Obligatory digital working time records must be maintained daily and made available to the ITSS (Labour Inspectorate) on request.

Dismissal management

Dismissal in Spain requires careful procedural compliance to avoid unfair dismissal (despido improcedente) or null dismissal (despido nulo) findings. Key dismissal types and their procedural requirements:

Objective dismissal (despido objetivo): based on economic, technical, organisational, or production causes. Requires a 15-day notice period, a written communication setting out the grounds with sufficient factual detail, and simultaneous payment of 20 days per year of service (up to 12 monthly payments) as statutory severance.

Disciplinary dismissal (despido disciplinario): based on serious employee misconduct (lista cerrada in Article 54 ET). Requires a written dismissal letter specifying the facts relied upon and the classification of the conduct, with no notice period but no statutory severance if the dismissal is found to be fair.

Collective redundancy (ERE — Expediente de Regulación de Empleo): for dismissals above the collective threshold (10 employees in companies <100; 10% in 100-300 employee companies; 30 employees in companies >300), a 30-day consultation period with employee representatives is mandatory.

Equality and diversity compliance

Spanish employers with 50 or more employees are required to have a formally approved equality plan (plan de igualdad) negotiated with the employees’ legal representatives. The plan must include specific measures addressing pay equity, work-life balance, harassment prevention, and the promotion of women in leadership roles. Annual pay audits are required for all companies with equality plan obligations.

Contact our people services team for a review of your employment law compliance position or specific labour matter.

Spanish employment law: the regulatory framework in 2026

Spain’s employment framework is shaped by four key bodies of law: the Estatuto de los Trabajadores (Royal Legislative Decree 2/2015), the Ley Orgánica de Libertad Sindical, the collective agreements (convenios colectivos) applicable to each sector, and a growing body of EU-derived legislation transposed into Spanish law. Companies operating in Spain must navigate all four layers simultaneously.

Recent and forthcoming changes with direct operational impact include: the reduction in ordinary working hours to 37.5 hours per week effective July 2025, the daily working hours recording obligation (registro de jornada, applicable since 2019 but now actively enforced with significant fines under the LRJSP), the mandatory pay transparency plan obligations for companies with 50+ employees under RD 902/2020, and the digital rights obligations of Articles 87-91 LOPDGDD.

The Inspección de Trabajo (Labour Inspectorate) has prioritised enforcement of working hours records, equal pay audits, and digital disconnection policies in its 2024-2026 strategic plan. Companies without compliant documentation face fines of EUR 751 to EUR 7,500 per infringement under the Ley sobre Infracciones y Sanciones en el Orden Social (LISOS).

Hiring strategies for talent acquisition

Beyond regulatory compliance, people services add commercial value through intelligent hiring strategy. Spain’s labour market has specific features that experienced employment advisers navigate: mandatory application of sectoral collective agreements (which determine minimum salaries, notice periods, severance calculations, and classification categories), the difference between employed (contrato de trabajo) and self-employed (autónomo) relationships, and the collaborative-sector cooperatives (sociedades laborales) that some companies use for specific workforce models.

For companies scaling from 10 to 50+ employees, the employment law compliance threshold changes significantly at key headcount levels: equality plans at 50+, worker committee (comité de empresa) representation at 50+, collective redundancy obligations above sector-specific thresholds, and mandatory training plans. Our people services team guides companies through each threshold before they arrive at it.

Payroll compliance and social security management

Spanish payroll is among the most complex in Europe due to the interaction between the Social Security General Regime contribution rules, the sectoral collective agreement (convenio) classification system, and IRPF withholding obligations. Key compliance requirements include:

• Monthly TC1/TC2 contribution declarations (now fully electronic via Sistema RED)
• SEPE notifications for new hires and terminations within 10 days
• Annual IRPF regularisation in December’s payroll
• Mandatory payslip delivery (nómina) with legally required disclosure items

Contact our people services team for a payroll and employment law compliance audit.

Managing employee representation and collective relations

Companies with 10 or more employees in a single workplace must hold elections for staff delegates (delegados de personal); companies with 50 or more employees elect a workers’ committee (comité de empresa). These bodies have specific consultation rights under the Estatuto de los Trabajadores — employers must consult them before implementing material changes to working conditions, collective redundancies, company transfers, and decisions with significant workforce impact.

Collective bargaining in Spain operates at two levels: the sectoral collective agreement (convenio colectivo sectorial) negotiated at industry level between employers’ associations and trade unions, and the company-level agreement (convenio colectivo de empresa) which can improve upon but not reduce below the sectoral agreement floor. Understanding which collective agreement applies, at what classification category each employee sits, and how the agreement’s provisions interact with individual contracts is essential for payroll accuracy and legal compliance.

Our people services team provides ongoing support for collective relations — negotiating individual modifications to employment conditions, managing the consultation obligations for organisational changes, and advising on collective bargaining strategy for companies considering a company-level agreement.

Self-diagnostic: employment compliance health check

• Are all employment contracts signed, dated, and retained for the mandatory 4-year archiving period?
• Does your payroll reflect the current sectoral collective agreement minimum salaries and category classifications?
• Is working time recorded daily for all employees (including remote workers) per the mandatory registro de jornada requirement?
• Have employees with equality plan obligations received their annual pay audit (auditoria retributiva)?
• Are there any fixed-term contracts that have exceeded 18 months of continuous employment — triggering presumption of indefinite status under the ET 2022 reform?