Employment law advisory that protects your business and your people

The Spanish employment law framework

Spanish labor law revolves around the Workers’ Statute, sector and company-level collective agreements, and constantly evolving case law. Each sector has its own particularities: working hours, professional categories, salary supplements, probation periods, and grounds for termination vary significantly depending on the applicable collective agreement.

Add to this recent reforms such as remote work regulation, mandatory equality plans, pay transparency registers, whistleblowing channels, and harassment protocols. The volume of obligations grows every year, and so does the cost of non-compliance.

Prevention versus reaction

Most labor issues that end in sanctions or lawsuits could have been avoided with preventive advisory. A well-drafted contract prevents an unfair dismissal claim. Proper time tracking avoids an inspection sanction. An up-to-date harassment protocol fulfills the legal obligation and protects company culture.

Our approach prioritizes prevention: regular labor audits, contract and policy reviews, HR team training, and alerts on regulatory changes affecting your sector. When prevention is not enough and a dispute arises, we act swiftly with all the information already prepared.

Common situations we handle

Among our clients’ most frequent queries are performance-related or objective dismissals, collective agreement negotiations, working hours and paid leave consultations, extended temporary disability management, disciplinary proceedings, scheduled and surprise labor inspections, and adaptation to new regulations such as mandatory equality plans or the obligatory whistleblowing channel.

The 2022 labour reform: what changed and why it matters

Royal Decree-Law 32/2021, the most significant overhaul of Spanish employment law since the 2012 reform, came into force in March 2022 and introduced changes that every employer operating in Spain must have fully absorbed by now. The reform’s four core pillars each carry distinct compliance obligations.

End of the obra y servicio contract. Spain abolished the project-based (obra y servicio) contract, which had been the default flexibility tool in construction, IT, and professional services. Companies that still use this modality — or that have not converted affected workers — face automatic conversion to indefinite employment by the Social Courts.

Restriction of temporary contracts. Temporary hiring is now permitted only for production peaks (máxima actividad) and worker substitution. Peak-activity contracts are capped at 90 days per calendar year per worker; substitution contracts require the specific cause to be stated. Exceeding these limits triggers conversion to indefinite employment and fines of €1,000 to €7,500 per worker.

Strengthening of fixed-discontinuous (fijo-discontinuo) contracts. The reform greatly expanded the scope of fixed-discontinuous employment, which now applies to seasonal work, on-call rosters, and recurring project work within a company. Employers in hospitality, agriculture, and retail must review their workforce structure and reclassify arrangements that no longer fit the post-reform temporary categories.

Enhanced collective bargaining. Company-level agreements may no longer undercut sector collective agreements on key conditions including wages, working hours, and employee classification. This reversal of the 2012 priority-of-company-agreements rule requires a review of all existing company agreements to ensure they comply with the new hierarchy.

Working-time registration: the enforcement reality

Daily working-time registration has been mandatory for all Spanish employers since May 2019 under Article 34 of the Workers’ Statute. The records must be kept for four years and made available to the Labour Inspectorate on request. In practice, many companies still use informal systems — paper sheets, screenshots, verbal agreements — that do not satisfy the legal requirement.

ITSS inspection criteria require the records to be objective, reliable, and accessible. Systems that rely on employees self-certifying hours without any verification mechanism are routinely challenged. The minimum compliant approach is a digital time-tracking tool with individual access credentials, automatic timestamps, and tamper-proof storage. Fine ranges for non-compliance: €626 to €6,250 for less serious infringements, €6,251 to €187,515 for serious infringements affecting multiple workers.

Equality plans and pay transparency

Companies with 50 or more employees are required to negotiate, adopt, and register an equality plan (plan de igualdad) with the Labour Authority. The plan must include a pay audit (auditoría retributiva) demonstrating that there is no unjustified gender pay gap. Companies with 250+ employees have been subject to this requirement since 2020; the threshold dropped to 100+ in 2021 and to 50+ in 2022.

Since April 2021, all companies regardless of size must maintain a salary register (registro salarial) documenting average remuneration broken down by sex, professional group, category, and pay grade. Workers’ representatives have a right of access; individual employees can access the average salary for their professional group. Wage gaps of 25% or more trigger an obligation to justify the differential or correct it.

Non-compliance with equality plan obligations blocks access to public contracts and subsidies, a material consideration for companies in construction, services, and public sector supply chains.

Whistleblowing channels: the 2023 obligation

Spain transposed the EU Whistleblower Protection Directive (2019/1937) through Law 2/2023, which came into force in March 2023. Companies with 50 or more employees must implement an internal whistleblowing channel (canal de denuncias) compliant with the law’s requirements: anonymity-preserving, independently managed, with a documented response protocol and a maximum three-month investigation window.

Companies with 249 or fewer employees had until 1 December 2023 to comply. The managing body (board of directors or equivalent) is personally responsible for the channel’s existence and proper functioning. Fines for non-compliance reach €300,000 for legal entities (€1,000,000 for serious infringements) and €100,000 for individuals in management roles.

Objective dismissal: the criteria courts actually apply

Objective dismissal (despido objetivo) under Article 52 of the Workers’ Statute requires a genuine economic, technical, organisational, or production-related reason. Courts have developed a detailed body of case law on what constitutes genuine cause and what amounts to disguised disciplinary dismissal.

The most common pitfall is insufficient documentation. An employer asserting economic grounds must present audited accounts showing sustained losses or a persistent revenue decline (defined in case law as three consecutive quarters of lower revenue compared to the same quarters the prior year). Technical or organisational grounds require a genuine restructuring, not merely a preference to reduce headcount.

Procedural requirements are strict: 15 days’ written notice, payment of 20 days’ salary per year of service at the time the notice is given (not at the end of the notice period), and a right for the employee to be accompanied at any meeting to discuss the dismissal. Failure on any procedural point converts an objectively justified dismissal into an unfair (improcedente) dismissal, triggering 33 days’ salary per year of service.

Labour inspections: what to expect and how to prepare

The Spanish Labour Inspectorate (ITSS) conducts both scheduled and unannounced inspections. Sector-specific inspection campaigns targeting time registration, safety protocols, and equal-pay compliance are announced publicly each year; individual companies may be selected. Denunciations from employees or former employees also trigger inspections and must be investigated by law within a defined timeframe.

Key documents that inspectors routinely request: employment contracts and any addenda, collective agreement compliance evidence, payslips for the last twelve months, time-tracking records, social security registration and payment evidence (TC2 reports), occupational risk prevention plan and training records, equality plan and salary register, and remote work agreements for hybrid employees.

Having these documents structured and current before an inspection request arrives is the difference between a clean outcome and a sanction proposal. We support clients in maintaining an inspection-ready compliance file and in managing the ITSS relationship from the first contact.

Remote work and the hybrid workforce: Spain’s specific obligations

Spain’s Remote Work Law (Ley 10/2021) imposes specific obligations on companies where any employee works remotely for 30% or more of the reference period (three months). These requirements apply to every remote worker individually and cannot be waived by the employee.

Written remote work agreement. A formal written agreement must be signed before remote work begins. The agreement must specify the proportion of remote and in-person work, the hours during which the employee must be available, the equipment provided by the company, the expense compensation mechanism, and the data protection and confidentiality obligations applicable to home working.

Expense compensation. Employees are entitled to reimbursement of the expenses directly or indirectly caused by remote work: electricity, internet connectivity, and consumables. The amount and mechanism must be agreed — if no amount is agreed, the employee retains the right to claim reimbursement. Spanish courts have not yet standardised the applicable amount; company policy should document the methodology.

Right to digital disconnection. Employers must adopt a written digital disconnection policy guaranteeing that employees can disconnect from work communication channels outside contracted hours. Repeated out-of-hours communications — emails, instant messages, calls — that create a de facto expectation of availability can constitute a violation of this right.

Equipment provision. The employer is responsible for providing, maintaining, and repairing the equipment and tools required for remote work. If an employee uses personal equipment, a clear equipment use policy covering data security, access rights, and the company’s right to access company data on personal devices must be documented.

Collective agreement compliance. Several sector collective agreements have introduced specific remote work provisions since 2021. These must be checked for any terms that differ from the statutory minimum and applied where they are more favourable to the employee.