Spanish market place: six points to have in consideration

The Spanish market place have a lot of positive advantages to all that business that wanted to expand in our country. That’s why, in the last years we notice a big increase in new international business and startups.

Before starting a new economy activity in another country, it’s necessary to know the sector and law regulation. One of the characteristics of our labor market is the protection of the workers rights, which requires a detailed regulation that makes it advisable to have specialized legal advice.

In this article you can finde some of the key legal elements to know the regulation of the labor market in Spain. We would also like to remind you that, as specialists in Labor Law, we can help you establish your company in the country or open your business with full legal guarantees.

Types of contracts allowed in Spain

Different types of contracts can be used in Spain, in order to adapt to the needs of the company. Although flexible contracts are allowed, linked to the company’s production cycle, their continuity is favored in order to guarantee labor stability.

The minimum working age is 16 years, although there are some restrictions when the worker has not reached the age of majority (18 years), and also probationary periods are allowed.

Working hours are usually a maximum of 40 hours per week. In addition, there are weekly and annual rest periods, to which must be added a minimum annual vacation time of 30 calendar days.

End of the contract

Except in the case of temporary contracts, the employment relationship in Spain may be ended by voluntary resignation of the employee, by agreement between the employee and the company or by dismissal. Dismissal is the unilateral decision of the company to terminate the employment relationship.

In order to protect the rights of employees, dismissals must be justified. Otherwise, compensation must be paid to the affected person. Also in those cases in which the dismissal is due to economic, technical, organizational or production causes. In addition, there are some cases in which dismissal is prohibited, such as when there are discriminatory causes.

How Social Security works in Spain

Social Security protects workers against contingencies such as accidents or retirement. It’s financed by contributions made both by companies and by the people covered by the system.

It’s precisely the company that contributes most to the system, although in cases of sick leave it is exempt from the obligation to pay wages until the worker recovers. The amount of this contribution depends mainly on the salary of the persons covered.

Hiring incentives

Both the central and regional governments have the mission of stimulating the labor market in Spain. Precisely for this reason, there are numerous incentives for hiring.

Generally, the incentives consist of discounts on social security contributions, but there are also economic and tax incentives.

Wage costs

Spain regulates an interprofesional minimum wage, which currently stands at 1,000 euros per month. However, each sector may have higher legal minimums.

In addition, workers are entitled to receive two extra payments per year, which are equivalent to one month’s salary and can be prorated month by month. It should be remembered that the maximum payment period is monthly.

Occupational risk prevention

The prevention of occupational risks is one of the keys to the labor market in Spain. Companies have the responsibility to ensure the health and safety of their employees, taking the necessary measures to minimize the risks inherent in the workplace. In this sense, the labor authorities may exercise vigilance functions, and sanctionate companies that do not respect the necessary precautions to guarantee occupational health and hygiene.