The Real Decree Law 16/2013 of December 20, 2013 on measures to promote stable hiring and improve the employability of workers includes modifications to Spanish Social Security contribution rates.
Modifications to Spanish Social Security Contribution Rates
- The Law reduces the unemployment contribution rate for part-time, fixed-term contracts by 1%.
- The Law makes the contribution rate of workers included in the Special Scheme of Self-Employed or Independent Workers (who at any time in each fiscal year have simultaneously hired and have working for them 10 or more workers) the same as the rate for workers in the contribution group 1 of the General Spanish Social Security System. This minimum contribution rate is applicable each fiscal year to self-employed workers included in the System starting from the entry date of the System (except for those who enter the System for the first time during the first 12 months of their activity).
- The Law clarifies the contribution rate of earnings, excluding a company’s allocations intended for training and studying of workers when the job activities or characteristics require the studies. Thus, the Law:
- Establishes that the allocations applicable to the contribution rate include those perceived in cash and in kind.
- Excludes a company’s allocations intended to pay for the costs of studies aimed at the updating, training, or retraining of its employees from the contribution rate when the studies are necessary for the implementation of the company’s activities or the characteristics of the job position.
- Establishes the company’s obligation to notify the Spanish Social Security General Treasury (“TGSS”) in each settlement period of the amount of all compensation due to its workers, regardless of whether they fall within the Social Security contribution rate and even if single rates apply.
- The Law clarifies the concept of groups of companies required for the sole purpose of the rule on financial contributions by worker layoffs affecting 50 or more years. Although the Law establishes the result of applying the concept of groups of companies outlined in Article 42.1 of the Spanish Commercial Code, the determination of the yearly earnings will only take into account the yearly earnings that companies (forming a part of this group in Spain) obtain.
- Lastly, to provide greater legal certainty, the Law establishes that the Spanish Government shall rearrange legislation on hiring incentives related to Social Security contributions. This will include a provision on the bonuses and reductions in contributions to Social Security effective on December 22, 2013 and will continue to harmonize legal or regulatory requirements and obligations where appropriate.
This article is not considered as legal advice