Employment law advisory in Valencia — full-spectrum labour compliance and workforce management for Valencian businesses

Employment law advisory in Valencia: managing the post-reform compliance challenge

Spain’s 2022 labour reform — the most significant restructuring of Spanish employment law in decades — has created substantial compliance obligations for businesses across the country, with particular impact in Valencia’s employment-intensive sectors. Hospitality, construction, retail, logistics, and agricultural businesses that relied on the now-abolished obra y servicio contract to manage workforce flexibility must find compliant alternatives or face conversion to indefinite employment relationships by the courts.

BMC’s Valencia employment law practice combines preventive compliance management with practical dispute resolution expertise. We advise businesses before problems arise, not just after they have received a Labour Inspectorate notification.

Valencia’s collective agreement landscape

The density and diversity of collective bargaining in the Valencian Community creates a complex landscape for HR and payroll management. Among the most significant agreements affecting Valencia businesses:

• Convenio del Metal de la Provincia de Valencia: Covering metalworking and manufacturing businesses, with detailed salary scales, overtime rules, and shift premiums
• Convenio Provincial de la Construcción de Valencia: Applicable to construction companies, with sector-specific health and safety obligations
• Convenio de Hostelería de la Comunitat Valenciana: Covering hotels, restaurants and catering across the community, with complex seasonal and part-time provisions
• Convenio del Comercio de Valencia: Applicable to retail businesses in the province

Applying the correct agreement — and applying it correctly in terms of salary categories, working time, leave entitlements, and bonus calculations — is a prerequisite for avoiding Labour Inspectorate liability. BMC manages collective agreement compliance as part of every ongoing employment law engagement.

The 2022 labour reform in Valencia: sector-specific impact

Royal Decree-Law 32/2021 hit Valencia’s key economic sectors harder than most. The manufacturing and export belt between Valencia city, Castellón, and the Alicante corridor — automotive supply, ceramics, footwear, chemicals — had extensively used the obra y servicio model to match workforce to project cycles. Post-reform, these companies face two compliant alternatives:

Fixed-discontinuous contracts (fijo-discontinuo): Appropriate for workers engaged repeatedly for recurring work at the same company. The worker is called to active service when work is available and remains employed (but inactive, without salary or Social Security contributions from the employer) during quiet periods. The 2022 reform extended the use of this contract significantly and made the status of fixed-discontinuous workers more secure.

Production-circumstances temporary contract (circunstancias de la producción): For genuine one-off peaks. Capped at 90 days per worker per calendar year (combined across all production-circumstances contracts for that worker). Using this contract beyond the cap results in automatic conversion to indefinite employment.

For Valencia construction companies, the key risk is legacy obra y servicio contracts signed before the reform that covered multi-phase projects. Courts in Valencia have been applying a strict interpretation: if the work was completed or the phase defined in the contract concluded, the contract is deemed to have expired. Workers performing functions beyond the original scope are entitled to indefinite employment from the date the original term ran out.

Working-time registration: Valencia Inspectorate enforcement pattern

The Inspectorate (ITSS) has concentrated working-time registration campaigns in Valencia’s hospitality sector (particularly coastal areas of the Province of Valencia and the Costa Blanca), the metalworking sector across the Province, and construction sites in and around the city. The campaigns are conducted jointly with Social Security verification teams, meaning a working-time inspection also checks Social Security registration status.

A compliant working-time register must record individual start and end times for every worker on every working day. Aggregate timesheets, summary weekly records, or foreman-certified group records are not compliant. Digital systems with individual authentication (PIN, biometric, NFC card) are accepted; paper records signed by the worker daily are accepted if they are genuinely contemporaneous.

Inspectors routinely cross-reference declared hours against overtime declarations in salary slips, against workplace alarm system entry and exit logs (where accessible), and against declarations on Social Security contribution bases. Discrepancies trigger an uplift procedure requiring the company to demonstrate that declared hours are accurate.

Equality plans in Valencia: the registration requirement

Equality plans for companies with 50 or more employees must be registered with the relevant labour authority — in Valencia, this is the Conselleria d’Economia Sostenible, Sectors Productius, Comerç i Treball of the Valencian Community (or the national registry if the company operates across multiple regions). Registration is a legal prerequisite: an unregistered equality plan does not fulfil the statutory obligation even if fully documented.

The plan must include: a diagnosis of the current situation, objectives and targets, a specific action plan, a monitoring committee, and annual audit results. The pay audit (auditoría retributiva) must identify any gender pay gap exceeding 25% in any professional category and set out a correction roadmap. The plan’s validity is a maximum of four years; renewal before expiry is mandatory to avoid a compliance gap.

Companies that fail to register an equality plan or that allow a plan to lapse without renewal face fines of between €751 and €7,500 per infraction at the less serious level, rising to €7,501 to €225,018 for serious infringements, and are excluded from receiving public subsidies and participating in public procurement.

ERE and ERTE management in Valencia: procedural requirements

A collective redundancy procedure (Expediente de Regulación de Empleo, ERE) in Valencia follows national rules under Article 51 of the Workers’ Statute but is administered by the Valencian Community labour authority for companies operating exclusively within the Valencian Community.

The procedure requires a formal negotiation period (período de consultas) with workers’ legal representatives of minimum 15 days (30 for companies with more than 50 employees), during which the company must share the cause justification, the number and categories of workers affected, the proposed selection criteria, and the proposed termination compensation. AEAT and Social Security inspections are typically requested by the labour authority for ongoing collective redundancy processes.

An ERTE (temporary employment adjustment scheme) follows similar procedural rules but with shorter timelines and with employees receiving SEPE unemployment benefit during the suspension or reduced-hours period. For ETOPs (economic, technical, organisational, or production causes), the minimum consultation period is seven days. After the ERTE ends, maintaining a headcount commitment (the safeguarding obligation) for a period equal to the ERTE duration is a standard condition of approval.

BMC manages the full Valencia ERE and ERTE process from cause assessment through to post-procedure compliance monitoring, including coordination with the labour authority, SEPE, Social Security, and workers’ representatives.

Whistleblowing channels in Valencia businesses

Law 2/2023, Spain’s transposition of the EU Whistleblower Protection Directive, came into force in March 2023. Companies with 50 or more employees must implement a compliant internal whistleblowing channel. In the Valencian Community, the obligation is enforced by the Agència Valenciana Antifrau (AVA) for the public sector and by the national enforcement bodies for private companies. Companies with fewer than 50 employees that provide financial services or belong to regulated sectors must also comply.

The channel must guarantee anonymity for the reporting person, be managed independently from management (either by a dedicated compliance officer or an external provider), and maintain a documented investigation process with a maximum three-month response window. BMC designs, implements, and manages whistleblowing channel services for Valencia businesses, including the required written policy, staff communication, and annual review of the channel’s operation.

The managing body (board of directors or equivalent governing body) bears personal responsibility for the channel’s existence and proper functioning — this responsibility cannot be delegated. Fines for non-compliance reach up to €300,000 for legal entities, rising to €1 million for the most serious infringements. Individual directors in management roles face personal fines up to €100,000.

Social Security compliance for Valencia businesses

Valencia’s diverse economic base creates specific Social Security compliance challenges across sectors. The TGSS (Tesorería General de la Seguridad Social) has expanded its cross-referencing with AEAT data, ITSS inspection reports, and platform economy data sources, making previously undetected Social Security underpayments increasingly visible.

Common compliance gaps identified in Valencia businesses:

Contribution base management. The Social Security contribution base must include all compensatory items paid to the employee: fixed and variable salary, commissions, benefits in kind, and overtime payments. Benefits in kind — company vehicles, health insurance, meal vouchers above the exempt threshold — are subject to Social Security even when they benefit from IRPF exemptions. The contribution base for these items must be computed separately from the IRPF taxable base.

Director Social Security registration. Directors with effective management control (administradores con control efectivo) are required to register in the autonomous workers’ scheme (RETA), not in the general scheme, regardless of how their employment relationship is formally structured. The boundary between a director with and without effective control is determined by their shareholding: 25% or more (directly or with family) creates a presumption of effective control. Incorrect registration — particularly directors registered in the general scheme who should be in RETA — can result in TGSS reclassification demands covering open periods.

Seasonal and fixed-discontinuous workers. Valencia’s agricultural and hospitality sectors rely heavily on seasonal workers. The Social Security compliance requirements for workers called to service on a recurring basis — the proper use of fixed-discontinuous contracts, the correct activation and deactivation of Social Security registrations between service periods, and the calculation of unemployment entitlement during inactive periods — require specific expertise that BMC provides as part of sector-specific employment law advisory.