Labour Compliance: Stay Compliant Before the Inspection Arrives

Employment compliance in Spain encompasses the set of legal obligations employers must fulfil under the Workers' Statute (Estatuto de los Trabajadores, Royal Legislative Decree 2/2015) and a series of specific regulations enacted since 2019, including mandatory daily working-time registration (Article 34.9 ET, since 2019), equality plans and pay gap registers mandatory for companies with 50 or more employees (Royal Decree 902/2020), sexual harassment and LGBTI harassment prevention protocols now compulsory for the same threshold (Law 15/2022), remote work agreements (Law 10/2021), and the obligation to implement a whistleblowing channel under Law 2/2023. The Labour Inspectorate (Inspección de Trabajo y Seguridad Social) enforces these obligations and can impose fines reaching EUR 225,018 per serious infringement under the Law on Infringements and Sanctions in the Social Order (LISOS).

Our employment compliance team combines employment law specialists with regulatory compliance experts to deliver a service that goes beyond one-off advice — a continuous monitoring and update programme that keeps your company ahead of its obligations.

A Moving Target: Spanish Employment Law Since 2019

Spanish employment compliance has been transformed over the past five years. The labour reforms of 2019, 2021, and 2022, the Remote Work Act, the Trans Law, the Riders Law, and the emerging pay transparency framework have created an environment where obligations accumulate faster than many companies can implement them. The Labour Inspectorate has significantly intensified its enforcement, with particular focus on working-time registration, equality plans, and gender pay gaps. Companies that managed their employment obligations correctly for years are finding themselves exposed by gaps they were not aware of.

Starting with the Audit

Our service always begins with an employment compliance audit: a structured review of every obligation relative to the company’s size, sector, and applicable collective bargaining agreement. This audit is the instrument that distinguishes the urgent (a gap that could generate an infringement notice in the next inspection) from the important (an obligation to implement over the coming months). The output is a prioritised action plan that allocates remediation effort rationally, starting from the highest-risk exposures.

The Equality Plan: the Most Complex Obligation

For companies with 50 or more employees, the equality plan is the most operationally complex mandatory requirement. Its preparation requires a prior diagnosis negotiated with the employees’ legal representatives, the design of measures across multiple areas (recruitment, training, pay, work-life balance, harassment prevention, communication), and registration in the REGCON. A poorly prepared or unregistered plan is, for all practical purposes, equivalent to having no plan: the company remains exposed to the same sanctions. Our team manages the complete negotiation and registration process.

Intersection with Employment Litigation

The relationship between an employment compliance programme and employment law litigation is direct. Well-designed compliance systems do not eliminate employment disputes, but significantly reduce the likelihood that they succeed: courts view the existence of documented compliance systems very positively, especially in harassment and discrimination cases. We design harassment protocols that are procedurally sound enough to be used as a positive defence in any subsequent proceedings, not merely as a paper obligation.

Working-Time Registration: The Most Inspected Obligation

The obligation to maintain daily working-time records for all employees (Article 34.9 ET, in force since May 2019) is the most frequently inspected employment compliance requirement in Spain. The Labour Inspectorate has issued thousands of infringement notices in the years since the obligation took effect. Beyond the direct fine risk, the absence of working-time records is treated as an adverse inference in overtime and salary claims: without records showing hours actually worked, the burden effectively shifts to the employer to disprove the employee’s claims. Our compliance audit always assesses whether the time registration system in use meets the regulatory standard — not just whether a system exists, but whether it records in the format and with the detail the Inspectorate requires.

Pay Transparency and the Gender Pay Gap Register

Royal Decree 902/2020 introduced mandatory pay equality and pay gap registers for companies with 50 or more employees. EU Directive 2023/970 on pay transparency — which Spain must transpose by June 2026 — will extend pay information obligations further: employees will have a right to information about pay ranges for their own and comparable positions. Our payroll services team coordinates with the employment compliance function to ensure that remuneration systems are structured consistently with pay equality requirements before the transposition deadline.

Remote Work and Digital Disconnection

The Remote Work Act (Ley 10/2021) requires a specific written agreement for regular remote workers covering equipment provision, expense reimbursement, data protection arrangements, health and safety conditions, and working-time rules. Companies that have formalised remote work informally — or not at all — since 2021 are exposed to both inspection risk and employment claims. The right to digital disconnection requires specific policies and training; failure to implement them is an infringement and increasingly relevant in employment litigation. Our employment law team designs these policies in conjunction with the compliance audit.

The Whistleblowing Channel: Employment Law Dimension

Law 2/2023 requires companies with 50 or more employees to implement an internal whistleblowing channel — an obligation that sits at the intersection of employment compliance and data protection. The channel’s scope must include reporting of employment law violations alongside criminal and regulatory infringements. We design whistleblowing systems that integrate the employment compliance dimension from the outset, ensuring that the channel is credible for the full range of reports it is designed to receive.

Regulatory framework: LISOS, ET, and recent labour reforms

Labour compliance in Spain rests on a framework that has been significantly expanded since 2019:

ET (Estatuto de los Trabajadores, RDL 2/2015): the principal employment law statute. Key recent amendments include: Article 34.9 (daily working-time registration, in force since May 2019); Article 64 (works council information and consultation rights, amended to require advance consultation on AI-driven decisions affecting workers); and Article 10 (Riders Law, RDL 9/2021, which presumed algorithmic management of delivery riders constitutes employment and introduced the right for workers’ representatives to receive information on algorithms affecting employment conditions).

LISOS (Law on Infringements and Sanctions in the Social Order, RDL 5/2000): the enforcement instrument. LISOS classifies employer violations as minor, serious, or very serious, with fines up to EUR 225,018 per very serious infringement. Multiple simultaneous violations are sanctioned cumulatively. The key LISOS risk areas for labour compliance include: equality plan absence or non-registration (serious: EUR 751–7,500; very serious if the infringement affects protected characteristics: EUR 7,501–225,018); working-time register absence (serious); harassment prevention protocol absence (serious to very serious); and remote work agreement absence (serious).

Royal Decree 902/2020 (Pay Equality): requires companies with 50+ employees to complete a pay audit (auditoría retributiva) as part of the equality plan process, documenting remuneration differences by gender across job classification groups. The audit must be updated every 4 years (or sooner if the equality plan is renewed). The resulting pay gap register must be made accessible to workers’ legal representatives.

Law 15/2022 (Equal Treatment): introduced the obligation to adopt protocols against sexual harassment and harassment based on gender, sexual orientation, gender identity, religion, racial origin, disability, and age — mandatory for all employers from May 2022. For companies with 50+ employees, these protocols must be negotiated with workers’ representatives and registered. For smaller companies, a documented policy is sufficient.

RDL 32/2021 (Labour Reform): restored the primacy of sector-level collective agreements over company-level agreements in most labour conditions, limited the use of temporary contracts to genuine temporary-need situations, and eliminated the “obra o servicio determinado” fixed-term contract category. Companies with significant temporary contract use require a post-reform contract structure review.

Ley 10/2021 (Remote Work Act): requires a specific written remote work agreement for employees working remotely on a regular basis (more than 30% of the time over a 3-month reference period). The agreement must cover: equipment and tools provision, expense reimbursement, right to digital disconnection, health and safety conditions, and applicable working-time rules.

Sectors with specific labour compliance risks

Hospitality and tourism: high staff turnover, extensive seasonal hiring, and dependence on collective bargaining agreements with complex overtime and rest-period rules (Hostelería collective agreement) create significant working-time register and social security contribution compliance risk. ITSS (Inspección de Trabajo y Seguridad Social) inspection activity in tourism regions — including Andalucía, the Canary Islands, and the Balearic Islands — is consistently above the national average.

Technology and startups: the post-RDL 32/2021 labour reform has significantly reduced the flexibility to use fixed-term contracts for project-based technology work. The “temporary project need” justification is no longer valid as a contract type — only genuine temporary-replacement (interinidad) and genuine seasonal demand (eventual) contracts remain available. Technology companies that staffed project teams on “obra o servicio” contracts must have regularised their contract base; those that have not face reclassification risk and retroactive social security contribution exposure.

Platform economy (gig workers and delivery): the Riders Law (RDL 9/2021) presumed that algorithmic management of delivery workers constitutes an employment relationship. ITSS has extended its inspection activity beyond delivery riders to other platform-managed workers (home cleaning, care services, logistics). Companies using platform models for Spanish workforce management require a specific legal assessment of the employment status risk before ITSS inspection occurs.

Construction: the construction sector has the highest rate of ITSS inspection activity in Spain. Health and safety (subcontractor coordination, hazardous materials, height work), social security contribution compliance (false self-employment among tradespeople is a systematic ITSS focus), and working-time register accuracy are the key areas of exposure.

Healthcare: the healthcare sector’s 24/7 operational model, complex multi-shift scheduling, and dependence on healthcare professionals who are simultaneously employed by multiple entities (SERMAS, private clinics, private practice) creates significant working-time register complexity. Ensuring that on-call hours (guardias), extended shifts, and rest period compliance are correctly recorded and compensated requires specialist employment compliance advisory.

Company size segmentation

Microenterprises (under 10 employees): fewer mandatory obligations than larger companies — equality plan, pay audit, and whistleblowing channel are not required. But working-time registration, individual remote work agreements where applicable, and basic harassment prevention policy are mandatory from day one. Fixed-fee compliance package from EUR 1,800 + IVA covering audit, documentation, and implementation.

SMEs (10–49 employees): harassment prevention protocol mandatory; working-time system audit; remote work agreement review for all remote staff; individual employment contract review for RDL 32/2021 compliance. Below 50 employees, formal equality plan not required but proactive gender pay gap documentation is increasingly expected by institutional clients and procurement processes.

Companies with 50–249 employees: full equality plan (with mandatory pay audit and REGCON registration); whistleblowing channel (Law 2/2023); collective bargaining compliance audit (applicable collective agreement identification and compliance verification — more complex for multi-sector or geographically dispersed companies); workers’ council information rights compliance for AI-assisted decisions.

Large companies (250+ employees): equality plans with 4-year renewal cycle; comprehensive pay audit; full whistleblowing system with independent management; company-level collective bargaining where applicable; human rights due diligence documentation for CSDDD supply chain compliance; CSRD workforce-related disclosure (ESRS S1 — Own Workforce).

Worked example: equality plan implementation for a 180-employee logistics company

A logistics company with 180 employees (68% male, 32% female) had been operating without a registered equality plan since the obligation applied to companies with 50+ employees in 2020. An ITSS inspection notice triggered the engagement.

Phase 1 — Prior diagnosis (6 weeks): analysis of workforce composition by gender across all job categories (from warehouse operatives to management); pay audit comparing remuneration by gender within each job classification group; analysis of working conditions (leave, part-time rates, promotion rates, training access); and identification of 7 areas requiring specific equality measures.

Key findings: an 18% average pay gap between male and female employees at the same job classification level in the “technician” group, attributable to discretionary supplement allocation. Promotion rates over 3 years: 12% for men, 6% for women. No woman in the 12-person management team.

Phase 2 — Plan negotiation (8 weeks): negotiation with the works council (comité de empresa) of 23 specific measures across recruitment and selection, job classification, pay, training, promotion, work-life balance, and harassment prevention. Key measures agreed: blind CV screening protocol for all management positions; supplement review to eliminate non-objective components; 40%/60% gender balance target for management team (3-year timeline); annual pay audit review with works council participation.

Phase 3 — REGCON registration (2 weeks): plan registered in REGCON. ITSS inspection: plan and registration certificate presented; inspection closed without sanction.

Ongoing management: annual equality plan review meeting with works council, pay audit update every 2 years (pending full 4-year renewal), and LISOS compliance monitoring.

Five common labour compliance mistakes

1. Working-time registers that do not meet the regulatory standard. A time registration system that records only clock-in and clock-out times — without capturing overtime, rest periods, and the specific hours worked — does not satisfy Article 34.9 ET as interpreted by ITSS inspection criteria. The system must record actual daily hours worked, including any overtime, with individual employee identification and preserved accessibility for 4 years. Paper records are legally valid but difficult to manage at scale.

2. Temporary contracts that no longer comply with RDL 32/2021. The 2022 labour reform eliminated the “obra o servicio” contract type and restricted “eventual por circunstancias de la producción” to 6 months (renewable to 12 in some collective agreements). Companies that continued using these contract types post-reform, or that have not regularised workers whose contracts expired without indefinite conversion, face significant reclassification risk and social security contribution exposure.

3. Equality plans prepared without genuine works council negotiation. An equality plan presented to the works council for signature without a genuine prior diagnosis and negotiation process is legally deficient. ITSS inspectors examine whether the prior diagnosis was properly conducted and whether the measures reflect the real findings — not whether the plan was formally submitted. A deficient plan is treated as equivalent to no plan for sanction purposes.

4. Remote work arrangements not formalised. Companies that implemented hybrid work during COVID and have not formalised individual remote work agreements under Ley 10/2021 are exposed on two dimensions: ITSS infringement risk (fine up to EUR 7,500 per employee without agreement), and civil liability risk if a remote worker suffers a work-related incident at home in an environment that has not been subject to any occupational health and safety risk assessment.

5. Missing the harassment protocol registration requirement. Law 15/2022 requires a harassment prevention protocol for all companies. For companies with 50+ employees, the protocol must be negotiated with workers’ representatives and registered in the applicable public registry. An unregistered or non-negotiated protocol provides no legal protection to the company in harassment proceedings and may constitute a LISOS infringement.

How we work: labour compliance advisory

Employment compliance audit (month 1): systematic review of all employment documentation against current obligations — working-time system, employment contract types, remote work agreements, equality plan status, harassment protocol, whistleblowing channel, collective bargaining compliance, and workers’ council information rights. Gap analysis report with risk-rated action plan.

Remediation (months 2–4): implementation of priority actions — contract regularisation, working-time system upgrade, equality plan launch (if not in place), harassment protocol drafting and registration, remote work agreement templates.

Ongoing compliance programme: quarterly legislative update memo, annual compliance review, and ITSS inspection management support (representation in inspection procedures, response to inspection acts, and legal defence in LISOS sanction proceedings).

Fixed-fee engagement for initial audit and gap analysis. Implementation and ongoing retainer priced per month based on company size. Contact our labour compliance team for a preliminary assessment.