Hiring employees from other countries is a great way to diversify your workforce and get fresh talent. But (yes, there is a but) managing compliant benefits for employees from countries other than your own can be a significant challenge.
In this guide to Spain employee benefits, we'll explain the mandatory benefits you must provide and some extra perks you can offer to give your company an advantage in attracting and retaining top Spanish talent.
Who is entitled to workplace benefits in Spain?
According to the Spanish Workers' Statutes (Estatuto de Los Trabajadores), temporary employees get the same benefits as permanent workers under Spanish employment regulations.
However, self-employed workers and independent contractors are not entitled to any workplace benefits.
Statutory and supplementary employee benefits in Spain
In Spain, employee benefits include a variety of standard statutory leave entitlements and a collection of more specific provisions. Here’s a rundown of the statutory and common benefits you should prepare to offer to your Spanish employees:
Minimum wage
According to the Ministry of Employment and Social Security, the national minimum wage in Spain for 2021 is €1,108.30 (US$1,308) per month, equating to €13,300 (US$ 15,709) per year when divided into 12 equal monthly payments.
In addition to base pay, the minimum wage should include benefits such as meal vouchers, medical insurance, and company vehicles (for qualified employees). The hiring company should all pay for this.
13th and 14th-month salary benefits
In addition to base pay, Spanish workers are entitled to a 13th and 14th-month bonus, known as pagas extraordinarias (extra or special pay). These additional payments are typically made during the summer and around the holidays, and each payment amounts to one-fourth of the employee's total annual salary.
Overtime benefits
Employees in Spain should only work 40 hours per week on average, according to labor laws. Overtime is permitted as long as it does not exceed an 80-hour limit per year. In exchange, employees should get at least 50% more pay than their regular rate or compensatory paid time off at the same increased rate.
To ensure fair compensation, both the employer and the employee must keep a record of overtime hours.
Holiday and annual leave entitlements
Your Spanish employees are entitled to at least thirty (30) days of paid vacation each year. Either party (employer or employee) can bump this up with a contract or a collective bargaining agreement. There are also fourteen (14) public non-working days per year, but those may vary slightly by region.
Paid vacation
Employees are entitled to at least 30 calendar days (22 working days) of annual paid leave, with one holiday period lasting at least two weeks. Employers cannot compensate for holidays with pay.
Each company determines the holiday calendar, which is then agreed upon by employees and employers. There are also paid holidays at the national, regional, and local levels.
Maternity leave
Expecting and new mothers should get a 16-week or 4-month leave. Eligible employees must take six of these weeks immediately following the birth. The remaining ten weeks are at the mother's discretion until the child is twelve months old.
Also, all pregnant women have the right to care at National Health Service hospitals before, during, and after giving birth (Sistema Nacional de Salud).
Partner and paternity leave
In the spirit of inclusion, ‘Partner leave’ has replaced ‘Paternity leave.’
This is for the parent who is not the biological mother. Spain’s paternity leave allowances have progressed over the years, increasing from two days to four months of paid leave for the other parent.
The 16-week partner leave system became official on January 1, 2021, making partners' paid time off equal to paid maternity leave for the first time in Spain's history. Eligible employees must take the first six weeks immediately after the child's birth.
Then, they can take the remaining ten weeks at any time during the first 12 months of the baby's life, which may be extended by two weeks per additional child in the case of multiple births. If the baby is born with a disability or health problem, employees can request an extra week's leave. If the baby is born prematurely or needs to remain in the hospital for more than seven days, employers should extend the leave period by up to 13 weeks.
Employers should note that employees have to have paid social security contributions correctly—for a minimum of 180 working days in the last seven years or 360 total days in their professional life to be eligible for 100% coverage.
Also, this is a worker's right, so one employee cannot transfer leave allowances to another. Parents in LGBT relationships, as well as adoptive parents, can take leave under Spanish law.
Sickness and disability leave
Employees in Spain have the right to sickness benefits under Spanish labor regulations, but these come with a few ifs. Employers owe them nothing for the first three days of diagnosis with a common illness.
From the fourth day, however, the employer must provide sickness benefits until the 20th day. After that, any payments made to the sick employee can be charged to the social security office, as long as the employee in question is registered.
Temporary disability benefits are daily payments that cover a worker's income loss due to illness, including common diseases or non-work-related injuries, occupational diseases, or work-related injuries. The benefit has a maximum duration of 365 days, but employees may get a 180-day extension if there’s a possibility of recovery during that time.
In cases of common diseases and non-work-related injuries, employers pay 60% of the monthly salary for days four to 20. For more prolonged absences or injuries suffered at work, employers must pay 75% of the salary.
In the event of occupational diseases or work-related injuries, the amount will be 75% of the base rate for benefits beginning the day after the date of leave from work.
Unemployment benefits in Spain
Spanish workers are entitled to an unemployment support payment from social security. These payments depend on certain conditions, which we’ll go through in later sections. However, eligible recipients receive an average pay based on the average salary they made contributions (not counting overtime) for at least six months before becoming unemployed. During the first 180 days of unemployment, Spain workers will receive 70% of that average and 50% going forward.
Termination and severance
Hiring and firing are inevitable phases of employment. Spain labor laws demand specific severance packages and stipulate clear grounds for termination of employment.
Individual termination grounds include the expiration of a contract for a specific job, resignation, and retirement due to permanent illness. Workers' incompetence, inability to adapt to technological change, poor attendance, and redundancies based on economic, technical, or organizational grounds can also be grounds for objective dismissal.
In the event of a fair dismissal, employees have the right to a minimum of 20 days' pay for each year of service, up to a maximum of 12 months' pay. In the event of unfair dismissal, an employee on an open-ended contract is entitled to at least 45 days' pay for each year of service, up to a maximum of 43 months' equivalent pay.
Health insurance
The law requires Spanish employers to provide medical insurance for their employees.
In Spain, all employees must enroll for the General Social Security Fund (Tesoreria General de la Seguridad Social - TGSS), the government agency regulating social security benefits. Typically, the social security premium is 28.3% of an employee's salary, with the employer required to pay 23.6% and the employee responsible for the remaining 4.7%.
Retirement benefits
Spain has one of the world's highest pension rates, with the government paying approximately 80% of an employee's final gross annual salary before retirement.
Employers are not required to offer pension benefits, but many do to attract top talent.
Supplemental pension plans provide total retirement income (including Social Security benefits), ranging from 60% to 80% of a final salary. Pensions are frequently calculated as a percentage of earnings regardless of the length of service.
If employers take service into account, the maximum pension accumulated after a specified number of years (usually 20 or more) and the annual percentage of pension credited for each year of service is 1.5 to 2% of earnings.
The maximum pension (including Social Security) is between 60% and 80% of the final salary earned after a full career with an employer.
Restrictions that apply to employee benefits
There are terms and conditions attached to some employee benefits in Spain. Here are some of them:
Unemployment benefits
To be eligible for unemployment benefits in Spain, individuals must be certified as legally unemployed by the Spanish Unemployment Office (Servicio Publico de Empleo Estatal). They must also have paid into the social security system for a minimum of one year. This contributory period entitles you to benefits for 120 days (4 months).
Those who have been employed for less than a year and have made insufficient social security contributions may apply for an unemployment subsidy, but they must meet the following criteria:
- Show proof of lawful unemployment.
- Sign an 'activity agreement' and register as a job seeker.
- They have contributed for at least three months if they have family obligations or six months if they do not.
- Their income does not exceed 75% of the National Minimum Wage.
Maternity benefits
Mothers must have paid enough social security to be eligible for the entire 16-week benefit of 100% salary.
Also, to be eligible for social security benefits, the employee must have worked for a minimum qualifying period, which varies depending on age.
- 21 and under. Employees under the age of 21 do not have to wait for a qualifying period; benefits begin from the day of employment.
- 21 to 26. Employees between the ages of 21 and 26 have a qualifying period of 90 days of paid employment in the previous seven years.
- 26 and above. Employees over the age of 26 have a qualifying period of 180 days of paid employment within the previous seven years.
The importance of learning employee benefits in Spain when hiring distributed talent
Getting compliant with international regulations for workplace benefits is not an entirely stress-free process. What’s the bottom line?
1. Showing that you’re invested in employees’ health and future
Plugging all the stops and ensuring your employees get the benefits due to them is a surefire sign that your organization cares about the well-being of its workforce. Employees want to work with companies who care, so you’ll be in a better position to attract industry top talent if you sort out all the statutory requirements.
2. Creating an inclusive culture regardless of where employees are located
A significant marker of true inclusivity is equal and fair treatment across the board, without discrimination because of race, gender, or religion. Proper knowledge (and implementation) of laws concerning each employee’s fair compensation will go a long way toward fostering a great work culture at your organization.
3. Complying with international regulations surrounding employee benefits
Lastly, and most importantly, playing by the rules that guide employee benefits pays off. Literally. Compliance is a tricky issue for many companies, and a misunderstanding of the labor laws in each country may lead to fines and sanctions or costly legal battles.
Figure out workplace benefits for a global workforce
Hiring a team member in another country may seem complicated, but Oyster makes it seamless. We take care of all the legalities involved in hiring a global workforce, so you (and your new talented employees) can focus on the stuff you're good at.
For more on how to hire, pay, and take care of employees in Spain, take a look at our Spain hiring guide.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop and take care of a thriving global workforce. It lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world with reliable, compliant payroll, and great local benefits and perks.
