One of the most sensitive issues for any foreign organisation wishing to operate in Spain is labour management. Spanish labour regulations are extensive, protective of workers and have particularities that may surprise companies accustomed to other systems.
Although it may seem complex at first glance, understanding how Spanish labour regulations work is key to hiring staff legally, avoiding penalties and building a stable employment relationship.
In this article, we will review in detail what the regulations say, the types of employment contracts in Spain, the main obligations of companies and the fundamental rights of workers. In addition, we will answer some of the most frequently asked questions that foreign companies wishing to hire employees in this country often ask.
What Foreign Companies Must Know About Spain Employment Laws
Index of contents
Firstly, Spanish labour legislation is mainly regulated by the Workers’ Statute, which acts as a general framework. In addition to this, there are collective agreements, which vary according to sector or activity, and Social Security regulations.
Any company wishing to operate in the country must comply with this legislation, regardless of whether it opens a subsidiary, establishes a branch or works through a representative in Spain of a foreign company.
For companies that do not want to set up a local entity, there is a widely used alternative: Employer of Record Spain (EOR Spain). This service allows companies to hire and manage employees in Spain in compliance with all legal obligations, without the need to formally establish themselves in the country.
The key is to understand that, in Spain, employment relationships are highly regulated. A private contract is not enough; it is mandatory to register employees, pay Social Security contributions and respect minimum rights that cannot be waived by agreement.
Types of Employment Contracts in Spain
As expected, the law recognises different types of contracts. Although there are particularities depending on the sector, these are the most common types:
Indefinite Employment Contract in Spain
This first example is the standard for stability in Spain. It offers security to the worker and limits the possibilities of unilateral termination by the employer. Dismissal must be justified and, if not, it gives rise to the right to compensation.
Temporary Employment Contracts and Legal Limits
In this case, it can only be used in very specific circumstances, such as: replacing another worker, occasional increases in production or projects with an end date. Abuse of temporary contracts may result in them being converted into permanent contracts by the courts.
Part-Time Employment Contracts in Spain
This is useful when the company needs to cover fewer hours than a full working day. The worker retains the same proportional rights as a full-time employee.
All these types of contract must be formalised in writing and registered with the relevant authorities. In addition, collective agreements may set additional conditions that the company must comply with.
Employer Obligations in Spain for Foreign Companies
The obligations of employers in Spain are not limited to signing a contract. A foreign company that wishes to hire employees in this country must comply with the following obligations, among others:
- Registration with Social Security: the company must register and enrol each worker before they begin to provide services.
- Social security contributions: monthly contributions to Social Security must be made, both by the employer and the employee.
- Salary compliance: the minimum wage and the rates set out in the applicable collective agreement must be respected.
- Occupational risk prevention: the company must assess the risks of the job and adopt protective measures.
- Working hours record: since 2019, it has been mandatory to keep track of the hours worked by each employee.
- Equality and non-discrimination: Spanish regulations require equal pay for men and women and prohibit any unequal treatment.
The practice of using an Employer of Record is a practical solution for companies without a legal presence in Spain, allowing them to delegate all these responsibilities to a local partner who acts as the legal employer.
Workers’ Rights in Spain: Key Employment Protections
Workers’ rights in Spain are one of the pillars of the employment relationship. Among the most notable are:
Holidays, Sick Leave and Paid Leave in Spain
Every worker is entitled to a minimum of 30 calendar days of holiday per year. In addition, the law provides for paid leave for illness, maternity, paternity, marriage or the death of a close relative.
Protection Against Unfair Dismissal in Spain
Dismissal must be justified and documented. Otherwise, it is considered unfair and the worker is entitled to compensation or reinstatement in their position.
Equality and Work-Life Balance Rights in Spain
Companies with more than 50 employees must implement an equality plan to ensure fairness between men and women. In addition, employees have rights related to work-life balance and the protection of their personal data in the workplace.
FAQs on Spanish Labour Law and Hiring in Spain
What is the minimum wage in Spain?
In 2025, the minimum wage (SMI) is set at €1,134 gross per month in 14 payments. This means that no worker can receive less, although the applicable collective agreement may establish higher amounts.
What Are the Legal Risks of Hiring Employees in Spain Without Compliance?
Hiring employees without complying with regulations entails a high risk: fines from the Labour Inspectorate, obligation to pay arrears, compensation to workers and, in serious cases, criminal liability for administrators.
Spanish labour legislation establishes a framework that provides strong guarantees, seeking to protect workers and ensure job stability. For foreign companies, this means adapting to a demanding regulatory environment, but one that is also predictable and secure.
Complying with obligations, formalising contracts correctly and guaranteeing rights not only avoids penalties, but also strengthens the company’s reputation in the Spanish market.
In short, knowing the terrain and the regulations is essential for any organisation seeking to hire in Spain legally and effectively. Good advice in this area can make the difference between successful expansion and unnecessary risk.
