Guide to hiring employees in Spain

Employment in Spain is highly regulated, with the main purpose to protect an employee's rights.

The regulations are complex: jobs are grouped into categories, and each category has a different set of regulations, called the convenio colectivo. These convenios regulate, for example, the legal salary range for each job, hours in a work day, vacation days per year. The following norms, though, generally hold true for employment in Spain:

• A 40-hour week.
• Either 14 payments or 16 1/2 payments annually. (Yes, you read it right!) If you choose 14 payments, you pay the monthly salary plus two extra payments due by July 10 and December 15. To avoid problems, make sure you agree on a gross annual salary, so it doesn't matter how it's divided. If you and your employee prefer 12 payments, just have the employee sign a statement to that effect, and let your payroll provider know.
• Vacation of 23 business days for each full year worked. See FAQ regarding holidays.
• There are no sick days per se. If an employee gets sick, they should find a doctor to sign a baja confirming that they are unable to work. With a baja, social security then takes over to pay the salary of the employee after a period of time.
• If you lay off someone, you pay 45 days of indemnization for each year that the employee worked for you. Note that if you fire someone with sufficient cause, then there is no indemnization payment necessary. In either case, though, you must pay something called a finiquito, which mainly covers any vacation that the employee has not yet taken. Make sure you get this finiquito signed by the employee.
• The employee has a right to 15 days (including weekends) for a marriage, 2 days for the birth of a child or the death of a family member, 1 day for home relocation, 4 months for maternity leave, and 20 days for paternity leave.

So, our advice to employers in Spain:

• Be aware that salaries are lower in Spain than in northern Europe and the USA. You can contact us before making your offer to see if you are in the range for Spain.
• When making a salary offer to someone in Spain, make sure you quote a gross annual salary (sueldo en bruto) rather than a net salary, so you're not in for a rude surprise. See our FAQ to find out how much you need to pay to social security.
• Companies have traditionally avoided giving indefinite contracts because of the difficulties in laying off such employees, and the high compensation package involved. Consequently, the Spanish mentality is such that receiving an indefinite contract is almost as important as what salary they will actually receive.
• You can't be too careful about employee issues. Spain is not a litigious country EXCEPT when it comes to an employee who has been fired. And the courts usually decide in favor of the employee. If you think there may be a problem firing an employee, we highly recommend speaking to a labour lawyer before you do the firing, to make sure the firing is done properly and avoid a ruling of "despido nulo".

Articles:
Types of work contracts, with samples
Guide to a Spanish payslip, with sample payslip
For foreign employees: the Ministry of Employment's guide to working in Spain
A guide to the regulation of occupational hazards in Spain

FAQs:
What corporate setup do I need to hire employees in Spain?
As an employer in Spain, how much will I pay to social security?
What are the holidays in Spain?
We are a Swiss company and we are going to open a call center in Barcelona to serve our European (non-Spanish) clients. Can we apply our Swiss labour laws to our non-Spanish employees?
My company is assigning to UK nationals to Spain to work there for 18 months. Will they liable for taxes in Spain?
I work for a UK company. I plan to move to Spain and continue to do consulting for the company. Can I be self-employed (autónomo) in Spain, and send the company invoices for my work?
In Spain, can employees can be transferred using Form E101?
I am a foreigner working in Spain. My company is paying into the Spanish social security system. Can this be transferred into my native country's system?