Significant Labor Reforms and Changes in Spain: What Expats Need to Know

In a move set to impact the lives of millions of workers in Spain, the Spanish government has been spearheading several key labor reforms and changes, some of which are already in effect or slated to begin in the near future.

Reduction in Working Hours

One of the most notable changes is the planned reduction in the standard working week. After nearly a year of negotiations with various stakeholders, including unions and business organizations, the government has decided to proceed with reducing the weekly working hours from the current 40 hours to 37.5 hours starting from January 1, 2025. This decision comes despite the lack of an agreement with business groups such as CEOE and CEPYME, who have expressed concerns about the impact on business autonomy and operations[3][4].

The reduction in working hours is part of a broader effort to improve work-life balance and productivity. The government, led by the Ministry of Labor, will initiate parliamentary procedures to enact this change into law. This move is supported by major unions like UGT and CCOO, which have been involved in the negotiations.

New Contract Types and Regulations

In addition to the reduction in working hours, significant changes have been made to the types of employment contracts in Spain. The Real Decreto-ley 32/2021, part of the labor reform, has introduced several key modifications aimed at reducing temporary employment and promoting stability.

Indefinite Contracts

The reform emphasizes the use of indefinite contracts, which are now the preferred type of contract to avoid temporary employment. These contracts have no time limit and include various categories such as contracts for people with disabilities, high-level management, and workers in social exclusion situations. The reform also limits the period for chaining temporary contracts to 18 months, down from the previous 24 months within a 30-month frame[1].

Training Contracts

Training contracts, known as "contrato de formación en alternancia," have also undergone significant changes. These contracts can now be signed for a minimum of 3 months and a maximum of 2 years, with no possibility of extensions unless necessary to complete the training. The contracts must include a plan for equality if the company is required to do so by law. The work and training hours are divided, with 65% dedicated to work and 35% to training in the first year, and 85% to work and 15% to training in the second year[2].

Other Contract Types

Other contract types, such as temporary and fixed-discontinuous contracts, have also been subject to changes. For instance, contracts tied to specific projects or tasks, like construction, now require employers to offer relocation proposals to workers upon the completion of the project[1].

Impact on Expats and Workers

For expats living and working in Spain, these changes could have several implications. The reduction in working hours could lead to a better work-life balance, although it may also affect the overall workload and productivity expectations. The new contract regulations aim to provide more stability and security for workers, which could be beneficial for those seeking long-term employment in Spain.

Additionally, the training contracts offer a valuable opportunity for both Spanish and expat workers to gain skills and experience while being employed, with significant benefits for companies in terms of reduced social security costs.

Next Steps

The government will proceed with a public consultation to finalize the details of the reduced working hours and other labor reforms. This process will involve negotiations with unions and other stakeholders to ensure a smooth implementation. As these changes take effect, it is crucial for expats and employers alike to stay informed about the evolving labor landscape in Spain.