New Measures to Improve Stable Hiring and Employability in Spain

On December 21, 2013, the Spanish Legal Bulletin (BOE) published the Royal Decree Law 16/2013, of December 21, on measures to promote stable hiring and improve the employability of workers, which entered into force on December 22, 2013.

Measures to facilitate part-time employment contracts

The Royal Decree Law 16/2013, of December 20, introduces various modifications to make the part-time employment contract more flexible while introducing measures to permit better control on the part of the Inspector of Spanish Labour and Social Security as well as to prevent fraud. Among these modifications include the following points:

  • Formalizing the part-time contract in writing should continue. Although the Law eliminates any reference to the official contract model to reduce administrative costs, this outcome leads to administrative simplification of the employment contract through the reduction in the number of contract models that currently exist.
  • The contract should state the number of regular working hours contracted for per day, week, month, or year as well as the distribution of the hours as stated in the collective agreement.
  • The Law abolishes the possibility of part-time workers working extra hours, except in cases to prevent or repair accidents or other damages of extraordinary and urgent nature. The Law does not affect the rules that govern the salary in these cases.
  • The Law modifies the rules of supplemental hours (however, any agreement made before December 22, 2013, will continue to be effective after this date unless the parties agree to modify it under the terms of the new legislation) in the following ways:
    • The Law establishes a distinction within agreements of the mandatory obligations of the worker, once he or she has signed the agreement (which should be formalized in writing as before but need not reference an official model), and volunteers, which only the employer may offer in contracts that are indefinite in duration and are truly voluntary on the part of the worker.
    • Regarding supplemental hours agreed to:
      • The Law allows for the possibility of including supplemental hours not only in the case of indefinite part-time contracts but also in temporary contracts. However, in both cases, the ordinary working days established in the contract should not include fewer than 10 hours per week when calculated on an annual basis
      • The Law increases the number of additional working hours from 15% to 30% of the regular hours stated in the contract. Collective agreements may establish other percentages with a minimum of 30% and a maximum of 60% of the regular contract hours.
      • The Law reduces, from seven days to three days, the period established to advise the worker of the day and time of the additional hours. The parties may reduce this warning period through agreement.
    • Regarding voluntary supplemental hours, the Law only provides these hours for the indefinite part-time contract with a working day of no fewer than 10 hours a week when calculated annually, and without prejudice to the agreement of supplemental hours. In these cases, the employer may, at any time, offer the worker voluntary supplemental hours, which may not surpass 15% (extendable to 30% by collective agreement) of the regular hours of the contract. These voluntary supplemental hours will not be calculated based on the percentages for the supplemental hours agreed upon, and the refusal of the worker is not punishable conduct.
    • The Law establishes an obligation to record the working days of part-time workers (except those who work in domestic service), and the Law determines the consequence of not doing so. The working day requires recording each day, totalling every month, and delivery of a copy to the worker with the receipt of the worker’s salary and a summary of all hours worked in each month including both regular and supplemental hours. The employer must save the monthly summaries of the recorded working days for a minimum of four years. If the employer fails to comply with the above obligations relating to recording, the contract is presumed full-time unless there is evidence to the contrary that proves the partial nature of the services.
  • The Law also allows the possibility to arrange a contract of support work for part-time entrepreneurs. In particular, it:
    • abolishes the existing requirement, in force until December 21, 2013, that this type of contract be full-time — therefore making it possible as part-time — and eliminates all references to the formalization through an official form in line with the continuation of the simplification of contract models, and
    • adapts to this new possibility all factors relating to tax incentives and bonuses, which will be enjoyed proportionally to the working day agreed to in the contract
  • The Law introduces new changes in the rules that contain incentives for this type of contract (hiring incentives, deductions in the corporation tax and social security contributions, among others)
  • It specifies that each sector of activity, through training, must contemplate the effects of having a part-time work contract
  • It matches the unemployment compensation rate that the employer pays for temporary part-time contracts to temporary full-time contracts. Beginning now, the unemployment compensation rate that the employer provides in temporary contracts is 6.70%. Thus, the Law provides for a reduction of 1% in the contribution rate for unemployment contingency contracts of a fixed, part-time term in the provisions of the Law on General State Budgets for 2014. To this end, the rate is set at 8.30% (6.70% paid by the employer — until now it was 7.70% – and 1.60% paid by the worker, which remains the same).

For more information on measures for stable employability in Spain,

Please note that this article is not intended to provide legal advice.

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