HR Consultancy Services in Spain
IRIS HR consulting has experience helping businesses grow in Spain. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in Spain to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. There are parts of Spanish employment laws that can seem complicated with expert HR help. That’s why it’s beneficial to seek meaningful partnerships with specialists to unlock new parts of the world.
As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.
Take your business to Spain with IRIS HR Consultancy.
Global expansion in Spain
As one of the largest countries in Western Europe, and one of the most widely spoken languages, Spain has real appeal for businesses looking to expand.
With its attractive reputation, Spain is known for:
- a powerful (and growing) economy;
- it’s key connections for international business;
- a solid infrastructure.
Spain is known for a powerful (and growing) economy, it’s key connections for international business, and solid infrastructure.
Its favourable trade relations, and deeply profitable partnerships, makes Spain a powerful contender in world business. Its easy access to the markets of EMEA (Europe, Middle East, North Africa) has attracted keen attention from investors in recent years, along with being considered one of the best locations to do business in Latin and South America.
A Guide to Employing Staff in Spain
Everything you need to know about the employment laws and compliance requirements in this country
A European Powerhouse
Located strategically on the global map, Spain is a great entry market for businesses seeking to eventually reach Europe with free trade agreements. With the terrestrial European markets on Spain’s borders, and with historic partnerships firmly in place, businesses can look to enjoy not only what Spain has to offer, but the rest of European markets too. There are few barriers to doing business in Spain, which is why it has been historically favourable with many large, international businesses. In many cases, Madrid plays a role as both home and headquarters to many of these multinational operations.
Establishing your business in Spain
Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.
For example, a Collective Bargaining Agreement (CBA) will form the basis of the employment contract and will legally bind the employer and all workers included within the scope of the collective bargaining agreement.
Yet, before establishing your operation in this Spanish market, you must ensure compliance with employment law.
Spanish Employment laws
When first expanding your business into Spain, navigating local laws, legislation and rules of employment laws is no mean feat, especially if you’re unfamiliar with the country’s driving policies. Throughout Europe, these laws are almost never universal. Rather, employment is dynamic and reflects the country social, economic, cultural opportunities.
Did you know?
The Mediterranean lifestyle has been known to attract employees and Spain benefits from a large (and growing) expat community.
Hiring & recruitment in Spain
When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer.
For foreign hires, such as EEA (European Economic Area) or Swiss Nationals do not need a work permit, however they must register a local address within 10 days of arrival. If their stay is longer than 90 days, they will need to apply for a residence card.
Other foreign nationals must obtain work permits which are only issued for certain, high-skilled categories. To employ someone without the right to work in Spain is a criminal offence which could lead to a custodial sentence and a fine.
Work visas in Spain
When it comes to planning a global expansion, one of the key areas that employer must get right is employment. After recruiting the right talent for your team, you’ll be faced with compliance regarding other Spanish employment laws, including the country’s stance on visas and permits.
Start by determining if your employees will require a work visa or permit.
If you employ citizens within the EU (European Union), then these workers will not require any permit or visa to work and live in Spain. For other expats outside of the EU, a job offer is needed, and the employer must arrange for authorisation before they can legally commence employment. When this occurs, it must be filed under a Shortage Occupation – this defines when a job has an expat as a result of no available talent within Spain or EU.
Employment rights & contracts in Spain
Although employment contracts do not have to be in written form, in practice most employees are employed under a written contract. Either party may request at any time during the employment relationship that the employment contract be formalised in writing. Certain types of contracts must be in writing such as training or specific work or service lasting more than four weeks, part time contracts, or home working contracts.
Even if a contract is verbal, the employer must provide conditions of employment in writing:
- Date of Employment
- Company’s registered office and employee’s location of work
- Employees professional category
- Details of remunerations
- Hours of Work
- Places of Work
- Details of notice periods
- Vacation entitlements
- Applicable collective agreements.
What are the working hours in Spain?
The maximum (as a general rule) of a working week in Spain is 40 hours over a 12-month period, although collective agreements may provide for different working time limits.
If the continuous working day exceeds 6 hours, a rest period of no less than 15 minutes must be granted.
Overtime in Spain
No more than 80 hours of overtime may be worked in a year. Overtime compensation is usually regulated within collective agreements.
Public Holidays in Spain
In Spain, there is a maximum of ten public holidays, Employees are entitled to the public holidays established by the various regional governments (“autonomous communities”) for that year.
- New Year’s Day
- Three Kings Day
- Labor Day
- Good Friday
- Assumption Day
- National Day
- All Saints Day
- Constitution Day
- Immaculate Conception Day
- Christmas Day
Vacation or Annual Leave
This entitlement is typically captured in the collective agreement. The statutory entitlement for employees is at least 30 calendar days which is the equivalent of 22 working days.
Spanish law stipulates vacation should be taken within the year that it was earned, any unused holiday will expire unless by special company arrangement, specific circumstances as provided by law.
Sick Leave in Spain
Those affected, and therefore unable to work, are entitled to statutory sick pay (SSP), which is a responsibility covered by the employer. SSP tackles from the 4th day of absence up until 12 months.
Employers are obliged to pay statutory sick pay of 60% of earnings (subject to social security contributions) from the 4th to the 15th day of absence. Employees are not entitled to receive pay for the first three days of absence. From the 16th day of absence, the employer pays 75% of earnings (subject to social security contributions). The social security system then reimburses this for up to 12 months.
Collective agreements often enhance SSP by paying the first three days of absence or by toping up the SSP to full pay.
Maternity Leave in Spain
Female employees are entitled to 16 weeks maternity leave with 6 weeks to be taken immediately after the birth which may be extended for multiple births or on health grounds.
This 16-week entitlement also applies in the cases of adoption or fostering provided that the eligibility criteria are met.
Paternity Leave in Spain
In 2021, paternity leave is increasing from 12 weeks to 16 weeks. From 1st January 2021, fathers will be entitled to the increase amount of paternity leave with the first 6 weeks required to be taken immediately after childbirth and the remaining amount to be taken before the child turns 1 years old. These rules also apply in case of adoption and fostering. Whilst on parental leave, employees are eligible for 100% of their salary which is funded by the social security system
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End of Service
HR in Spain requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.
For these more complicated matters, you will need expert HR guidance to navigate Spanish employment laws and remain compliant.
Termination (including Severance) in Spain
The conditions of termination should be notified in the collective agreement, or terms of employment. If no agreement is in place, 15 days of notice is given as stipulated by the Spanish Workers Statue regulations. The seniority of the employee is often taken into account when setting the notice period with Senior Managers, who are generally required to give a minimum of 3 months’ notice.
The employer must inform the Employment Office (INEM) and the workers representative about the conclusion of an employment contract.
Garden leave is not a recognised concept under Spanish law. However, once notice has been served, the parties may nonetheless agree that the employee will not attend for work during the notice period or will take any unused vacation during that period.
Spain has a comprehensive health and welfare system, funded by contributions from both employees and employers (referred to as sistema de seguridad social (INSS)). Authorities are strict on the collection of the contributions with the appropriate reporting month and require employees to be registered in advance of their start date.
Common Supplemental Benefits
The Spanish state pension is funded by compulsory contributions from both the employee and the employer, self-employed individuals are required to cover both contributions.
Although encouraged by the Government, only a small number of employers supplement the social security pension. Companies setting up occupational pension plans must have a Spanish Tax Identification Number (NIF). Defined contribution (DC) schemes are offered by employers where an employee typically contributes around 4% of their salary.
Contributions to pensions made by employers and employees attract tax relief but are also subject to limits.
Private Medical Insurance (PMI)
Private medical insurance is widespread with 3 in 4 employers providing their staff with medical insurance. The purpose behind it is to avoid the long waiting times for treatment under the state health system. In Spain, an employer is permitted to pay up to €500 per annum, per family member covered, towards the cost of Private Medical Insurance for employees, without them attracting a benefit in kind tax charge. Together these points mean that private healthcare provision is increasingly viewed as an important component of an attractive remuneration package.
From an employer’s perspective it helps ensure that the work impact of a medical condition is minimised.
Lump sum death in service cover is very common with approximately 80% of employers having this in place. For it to remain relevant as an employee progresses, linking the amount provided to some multiple of salary is normal. Typically, these multiples range from 1 to 4 times base salary.
Why Partner With IRIS?
When entering new, exciting countries around Europe, like Spain, you will need an employment specialist to navigate the parts of Spanish employment laws. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.
Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Europe, especially when they build bridges in Spain.
Our cost-effective, knowledgeable approach to HR in Spain makes us an ideal partner to commence your overseas plans.