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Legal Article

Employment law updates: what your company needs to know

Recent changes in Spanish employment legislation and how to adapt.

5 min read

The Spanish labor framework continues its transformation process with regulatory changes that directly affect human resources management in companies. Knowing these developments and adapting in time is essential to avoid contingencies and take advantage of new opportunities offered by the legislation.

Reduction of working hours

One of the most significant measures this year is the consolidation of the progressive reduction of maximum working hours. Companies must review their collective bargaining agreements and individual contracts to ensure compliance with the new limits, paying special attention to time-tracking systems and shift organization.

The reform, driven by the Royal Decree-law reducing the maximum ordinary working week to 37.5 hours, requires a review not only of existing contracts but also of agreements on irregular distribution of working time. Non-compliance can result in serious infractions with fines ranging from €751 to €7,500 per affected worker under the Law on Infractions and Penalties in the Social Order (LISOS).

The impact of this measure varies significantly by sector. While for professional services firms the adjustment can be relatively straightforward, for sectors such as hospitality, retail or manufacturing, reorganizing schedules requires careful planning and, in many cases, renegotiation of conditions with worker representatives. Sectoral collective agreements play a decisive role: in those already establishing hours below 37.5 per week, the reform has a neutral impact; in others, collective bargaining must adapt within the established deadlines.

Working time records: current obligations and new requirements

The daily record of working hours, mandatory since Royal Decree-law 8/2019, remains one of the main focuses of the Labour Inspectorate. Infraction notices for absent or deficient time records have increased notably in recent years. Regulations require the record to be precise, daily and unalterable, with documents retained for four years.

With the reduction in working hours, the record becomes even more important as a verification tool for compliance. Companies must ensure that their systems — whether biometric clocking, mobile applications or paper records — meet the reliability and integrity requirements demanded by the labour authority.

Remote work and digital disconnection

The regulation of remote work continues to mature with new clarifications on costs that the company must bear, digital disconnection rights and occupational health and safety obligations for remote workers. Companies that have not yet formalized their remote work agreements should do so without delay to avoid penalties.

Law 10/2021 on distance working establishes that the agreement must be formalized in writing before remote work begins and must include: an inventory of means and equipment provided by the company, reimbursement of expenses, schedule and availability rules, and risk prevention measures. The obligation to provide adequate technological means rests with the employer, including ergonomics, data protection and psychosocial risk assessment for the remote worker.

The right to digital disconnection, recognized in Organic Law 3/2018, requires companies to develop and communicate an internal disconnection policy. This policy must clearly establish when workers are not obliged to respond to electronic communications outside their working hours — particularly relevant in hybrid work environments where the boundaries between working time and personal time become blurred.

Hiring and equality

Obligations regarding equality plans are being strengthened, with lower application thresholds and more demanding pay audit requirements. Companies with more than fifty employees must have a registered and current equality plan on the Register of Equality Plans (RPI), including specific work-life balance measures and anti-harassment protocols.

The pay audit, required as part of the equality plan, demands a detailed analysis of salary differences between workers of equal value to identify and correct unjustified gender pay gaps. The Ministry of Equality has strengthened oversight of these plans, with specific inspections verifying both the preparation and the effective implementation of measures.

New contract types and termination

The 2021 labor reform (Royal Decree-law 32/2021) has consolidated the permanent contract as the general norm, limiting temporary contracts to two specific circumstances: productive fluctuations and worker substitution. Companies must verify that their current temporary contracts have a justified cause, since fraudulent use can result in automatic conversion to permanent contracts and additional penalties.

Regarding collective redundancies (ERE), Royal Decree 1483/2012 remains the reference standard, but the criteria for negotiation with worker representatives and the thresholds for triggering the consultation period have been subject to judicial reinterpretation in recent years. Specialist advice is essential before initiating any restructuring procedure.

Practical recommendations

At BMC, we advise companies to conduct a comprehensive labour audit that identifies risk areas and improvement opportunities. The main areas of attention for 2026 are: verification of compliance with the new maximum working week, review of remote work agreements, update of the digital disconnection protocol, and confirmation that the equality plan is current and registered.

Prevention is always more cost-effective than reaction. A serious labour infraction can carry fines of up to €225,018 in the most serious cases (repeated very serious infractions), plus reputational damage and litigation costs. Proactive legal advice allows not only regulatory compliance but also improvements in workplace climate and talent retention — factors that translate directly into productivity and business competitiveness.

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