Employer of Record Guide in 

Spain

Annual Leave (Vacaciones)

• Minimum entitlement: 30 calendar days (22 working days) per year
• Accrual: Proportional from start date, cannot be waived
• Timing: Must be taken within the calendar year (some carryover allowed by agreement)
• Payment: Full salary during vacation period

Sick Leave (Incapacidad Temporal)

• Duration: Up to 365 days (extendable to 545 days)
• Payment structure:
  • Days 1-3: No payment (employer may provide)
  • Days 4-15: 60% of salary (paid by employer)
  • Days 16+: 75% of salary (paid by Social Security)
• Medical certification: Required from day 4 onwards

Maternity Leave (Permiso de Maternidad)

• Duration: 16 weeks (112 days)
• Payment: 100% of salary paid by Social Security
• Flexibility: 6 weeks must be taken immediately after birth, remaining 10 weeks can be shared with partner
• Job protection: Right to return to same or equivalent position

Paternity Leave (Permiso de Paternidad)

• Duration: 16 weeks (same as maternity)
• Payment: 100% of salary paid by Social Security
• Mandatory period: 6 weeks must be taken immediately after birth
• Sharing: Can share remaining weeks with partner

Other Statutory Leave

• Marriage leave: 15 calendar days
• Bereavement leave: 2-4 days depending on relationship and travel required
• Moving house: 1 day
• Exam leave: Time necessary for official examinations
• Breastfeeding leave: 1 hour daily until child is 9 months old

Summary

Termination Categories

Disciplinary Dismissal (Despido Disciplinario):

• For serious misconduct or repeated violations
• No compensation required if justified
• Employee can challenge in labour court

Objective Dismissal (Despido Objetivo):

• Economic, technical, organisational, or production reasons
• Requires 15 days' notice
• Compensation of 20 days per year of service

Collective Dismissal (Despido Colectivo):

• Affects multiple employees
• Requires consultation period and administrative approval
• Enhanced compensation and procedures

Notice Requirements

Severance Calculations

Objective Dismissal: 20 days of salary per year of service (maximum 12 months) Unfair Dismissal: 33 days of salary per year of service (maximum 24 months)

Calculation based on last salary including proportional parts of extra payments

Probationary Periods

• Standard employees: Up to 6 months
• Technicians: Up to 6 months
• Senior management: Up to 6 months
• Collective agreements: May establish different periods

During probation, either party can terminate without notice or compensation.

Final Pay Requirements

Employers must provide final settlement within 10 days of termination, including:

• Outstanding salary
• Proportional vacation pay
• Proportional extra payments
• Any applicable severance

National Public Holidays

Spain observes 14 public holidays annually (8 national + 2 regional + 2 local + 2 additional):

Regional Variations

Each autonomous community designates 2 additional regional holidays:

• Catalonia: Sant Jordi (April 23), National Day of Catalonia (September 11)
• Madrid: San Isidro (May 15), Almudena (November 9)
• Andalusia: Andalusia Day (February 28), varies by province
• Basque Country: Easter Monday, San José (March 19)

Local Holidays

Each municipality can designate 2 local holidays, often related to patron saints or local traditions.

Holiday Pay Rules

• Eligibility: All employees entitled to holiday pay
• Payment: Full salary for public holidays
• Working on holidays: Double pay or compensatory time off
• Substitute days: If holiday falls on weekend, substitute day may be designated

Required Documentation

Employment Contract (Contrato de Trabajo):

• Must be in writing for certain contract types
• Include job description, salary, working hours, duration
• Specify trial period if applicable

Tax and Social Security Forms:

• NIE (Foreigner Identity Number) for non-EU citizens
• Social Security registration
• Tax withholding forms (Modelo 145)

Work Authorisation:

• EU citizens: Right to work automatically
• Non-EU citizens: Work permit required before employment

Legal Compliance Requirements

Data Protection (GDPR/LOPD):

• Employee consent for data processing
• Privacy policy notification
• Secure data handling procedures

Health and Safety:

• Workplace risk assessment
• Safety training provision
• Medical examinations if required

Labour Registration:

• Register employment contract with authorities
• Social Security affiliation
• Occupational risk prevention measures

Contract Elements

Mandatory Clauses:

• Job title and description
• Salary and payment terms
• Working hours and schedule
• Holiday entitlement
• Notice periods
• Applicable collective agreement

Recommended Clauses:

• Intellectual property assignment
• Confidentiality obligations
• Non-compete restrictions (limited enforceability)
• Disciplinary procedures

Implementation Timeline

Worker Classification

Spanish law distinguishes between employees and autonomous workers (autónomos):

Employees (Trabajadores por cuenta ajena):

• Work under employer direction and control
• Receive regular salary and benefits
• Protected by labour law and collective agreements
• Employer handles tax withholding and social security

Autonomous Workers (Trabajadores Autónomos):

• Work independently with own clients
• Invoice for services provided
• Responsible for own taxes and social security contributions
• Limited labour law protections

TRADE (Trabajadores Autónomos Dependientes):

• Special category for autonomous workers dependent on single client
• Enhanced protections similar to employees
• Specific termination and payment rules

Collective Bargaining

Spain has a comprehensive collective bargaining system:

Sectoral Agreements: Cover entire industries or regions Company Agreements: Specific to individual companies Hierarchy: Company agreements can improve but not worsen sectoral terms

Common sectors with collective agreements include:

• Metal and manufacturing
• Construction
• Retail and commerce
• Banking and finance
• Healthcare and education

Cultural Considerations

Work-Life Balance:

• Long lunch breaks (2-3 hours) still common in some regions
• Flexible working hours increasingly accepted
• August vacation period widely observed

Communication Style:

• Formal address (usted) in initial interactions
• Personal relationships important in business
• Punctuality expectations vary by region

Diversity and Inclusion:

• Strong anti-discrimination laws
• Gender equality requirements for larger companies
• Accommodation requirements for disabilities

Remote Work Framework

Legal Framework:

• Right to request remote work (not guaranteed)
• Employer must provide written response to requests
• Equal treatment principle applies to remote workers

Employer Obligations:

• Provide necessary equipment and tools
• Cover additional costs (internet, utilities proportionally)
• Ensure health and safety standards
• Maintain data protection compliance

Cross-Border Considerations:

• Tax implications for work from other countries
• Social security coverage requirements
• Permanent establishment risks for employers

What Borderless AI Handles:

• Employment contract preparation and local compliance
• Payroll processing including complex Spanish tax calculations
• Social Security registration and contributions
• Ongoing labour law compliance monitoring
• Local HR support and employee relations