In general, from a labour and social security standpoint, there are essential formalities that must be performed in order to open a business, company or workplace in Spain*.
In this article you will find a list of the main aspects you need to take into account as a company.
Formalities
| Registration of the company with the Spanish social security authorities (obtainment of a social security contribution account code) | Registration must take place prior to commencement of activities. In general, companies register with the Social Security General Treasury by submitting the relevant official form and documentation identifying the company (deed of formation, document issued by the Ministry of Finance assigning the tax identification number and stating the economic activity of the company, powers of legal representation of the company, document of affiliation to the collaborator mutual insurance company, among others) |
| Notification of hiring of employees | The hiring of employees must be notified for social security purposes once the company has been registered with the social security authorities and before the workers start work. Notifications are generally made electronically, using the RED electronic document submission system. |
| Notification of opening of workplace | The commencement of activities at the workplace must be notified to the labour authorities within 30 days of its opening using the official form provided for such purpose in each Autonomous Community. An occupational risk prevention plan must usually also be attached |
As a general rule, all employers, their employees, self-employed workers, members of manufacturing cooperatives, domestic personnel, military personnel and civil servants who reside and/or perform their duties in Spain are required to be registered with, and pay contributions to, the Spanish social security system.
The administrators or members of the Board of Directors of a company could be included in the General Program (RGSS), in the General Program as “assimilated” or in the Special Program for Self-Employed Workers (RETA).
Contract
The employment contract is an agreement that binds companies and workers. It may be open-ended or have a time limit. There are different types of contracts in the Workers Statute: permanent, temporary or training. Each has its own characteristics and peculiarities. The contract should include the following information:
• Identification of the parties in the employment agreement
• Employment duration for temporary contracts
• Work location
• Professional group or category
• Base salary as well as other compensation or benefits, if any
• Total working hours and holidays
• Notice periods
• Applicable collective agreement
To help you understanding the requirements, we have included a template of a standard contract that you can download.
In general, discrimination in hiring or in the workplace on the grounds of gender, marital status, age, race, social status, religion or political ideology, membership of a labor union or otherwise, or on basis of the different official languages in Spain is prohibited. The minimum employment age is 16 years old. There are certain special rules applicable to the employment of persons under the age of 18 (who, for example, cannot work overtime or at night).
Workers are represented by labour unions. At company level, workers are represented by directly-elected representatives (workers’ delegates or works committees, which may or may not belong to a union) and by labour union representatives (workplace union branches and union delegates representing a labour union at the company).
Employers are not obliged to have workers’ representatives if workers have not requested union elections. However, if requested by the workers, employers are obliged to allow union elections and appoint such representatives on the terms provided by law.
Collective labour agreements are agreements executed between the workers’ representatives and the employers’ representatives. They regulate working conditions and terms of employment and are binding on the parties.
Wage cost
Minimum wage is established by the government every year for persons over 18 years of age and amounts to €1,000 a month or €14,000 per year (including 12 monthly and 2 bonus payments) for 2022.
The contribution base is the gross monthly salary, taking into account the maximum- (€4,070.10) and the minimum-capped bases. If there is any overtime, it must be included, extra payments prorated (the amounts which will be received later by the employee) and paid, if any.
Of these, transportation costs and allowances paid to employees can be excluded if they are duly justified, since they are not considered remuneration.
The minimum wage in Spain in 2022 is €1,000 a month or €14,000 per year.
Spanish government
As can be seen, the part of the contributions that the company must pay represents an additional cost on top of the gross salary of the employee.
Other forms of paid leave in Spain
There are more labour and Social Security formalities and rules to open a business in Spain, as workers may take paid time off for the following:
• Temporary incapacity payment: The maximum period of such leave is 18 months, after which the authorities will review the situation. The employer is responsible for applying for your sick leave and will pay the costs of the first 15 days of the allowance. After that, the Sistema Nacional de la Seguridad Social will bear the costs.
• Marriage: 15 calendar days
• Death, accident, or serious illness or hospitalization of a family member: two calendar days, or four if travel is required
• Moving house: one day
• Breastfeeding children under nine months of age: one hour of absence from work per day, or half an hour if taken at the beginning or end of the working day. Either the mother or the father can take the leave if both are working
• Legal guardianship of a child under 12 or of a person with a disability: reduction of the working day by between one-eighth and one-half
• Public and personal obligations (e.g., jury duty, appearance in court): as long as necessary
• Perform trade union or workers’ representation duties: the amount of time established by law or collective agreement
• Holidays pay in Spain: A full-time worker may take 23 working days (30 calendar days) of paid holiday time annually.
• Maternity and paternity pay: Spain has been working in recent years to balance leave allowances for all parents. It’s now 16 weeks for both parents. Spain also grants this paid leave to adoptive and foster parents. In the case of a birth, the parents must take off six weeks immediately after the child is born. Parents can take off the remaining 10 weeks as desired within the 12 months following the birth or adoption. They must confirm the leave with their employer
Visas and work and residence permits
European Union nationals and their family members may live and work (as employees or self-employed workers) in Spain without needing to obtain a work permit. However, in general they must obtain the relevant EU citizen registration certificate or EU citizen family member residence card.
Non-EU nationals must obtain prior administrative authorization to be able to live and work in Spain.
Occupational risk prevention
Employers must guarantee the health and safety of their employees but without merely complying with legislation and remedying risk situations. It means that they have an obligation to perform risk assessments, adopt measures in emergency situations, provide protective equipment and to guarantee the health of employees, including pregnant or breastfeeding women (ensuring they do not perform tasks which could put them or their unborn child/baby at risk).
All employers must have a risk prevention service to provide advice and assistance in prevention tasks. Employers must appoint one or more workers to take charge of these activities. At companies with less than ten workers, this service may be provided directly by the employer, provided that it habitually pursues its business at the workplace and has the necessary capacity to do so. An external risk prevention service may also be used in certain cases.
Failure to comply with occupational risk prevention obligations may give rise administrative, labor, criminal and civil liability.
Conclusion
These are the labour and social security formalities to open a business in Spain in 2022. It may vary from year to year, so we recommend to contact us to get all the latest information and support in opening your business or subsidiary in Spain.
* Information taken from the MODEL TA6. Learn more
