The changes to job contracts in Spain in September 2023
Important changes regarding incentives employers receive for hiring certain types of workers come into force in September 1st and will impact any contracts signed after that date.
These changes introduce a new system of incentives for hiring, with a special focus on permanent contracts and hiring vulnerable groups, particularly women and the long-term unemployed, the over 45s, and young people under 30.
From September, a new law (Royal Decree-Law 1/2023 to be specific) will create incentives for employment contracts and improving social protections for Spanish workers.
Regardless of when, how or if a new government that comes in, these new measures will be implemented with a view to favouring indefinite-term contracts and vulnerable groups.
One of the major pieces of the legislation concerns benefits that some companies will receive when hiring certain employees.
Rewarding permanent contracts
One of the main objectives of the new law is creating stable employment, as well as promoting the hiring of groups considered vulnerable and the long-term unemployed.
As such, companies that take on people like this will receive certain fixed tax deductions:
Long-term unemployed men under 45: €110 per month for three years.
Long-term unemployed women: €128 per month for three years.
Long-term unemployed and aged 45 or over: €128 per month for three years.
Hiring people with a certificate of social exclusion: €128 per month for four years.
Hiring victims of terrorism: €128 per month for four years.
Hiring women who are victims of gender violence: €128 per month for four years.
People with intellectual disabilities: €128 per month for four years.
People with permanent or absolute disability: €138 per month for two years.
Young people under 30 with low qualifications: €275 per month for three years.
READ ALSO: How a spike in permanent contracts is improving job security in Spain
Benefits coming to an end
As of September 1st, a series of benefits that are currently in force will also come to an end. One of these to go will be benefits for hiring family members (except for people with disabilities).
The hiring bonuses will also disappear for workers who have been in the same company for the last 12 months with a permanent contract, as well as for those who have been in the same company for the previous six months with a temporary or training contract.
In addition, the total rebate for contracts with unemployed workers for the replacement of workers due to maternity, fostering and adoption will end.
This benefit will be reduced from 100 percent to a flat €336 rate in two cases:
- For fixed-term contracts made to unemployed people under 30 years of age, to replace workers receiving economic benefits for risk during pregnancy or risk during breastfeeding.
- For fixed-term contracts for unemployed persons under 30 years of age, to replace workers receiving economic benefits for childbirth and childcare.
Other benefits to companies that will be reduced are those related to part-time contracts. In these cases, the amount of the bonuses will be reduced proportionally, while part-time contracts of less than 50 percent of the full-time working day will not be incentivised, except in cases of work-life balance leave.
READ ALSO: What are the types of work contracts in Spain and which one is the best?
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These changes introduce a new system of incentives for hiring, with a special focus on permanent contracts and hiring vulnerable groups, particularly women and the long-term unemployed, the over 45s, and young people under 30.
From September, a new law (Royal Decree-Law 1/2023 to be specific) will create incentives for employment contracts and improving social protections for Spanish workers.
Regardless of when, how or if a new government that comes in, these new measures will be implemented with a view to favouring indefinite-term contracts and vulnerable groups.
One of the major pieces of the legislation concerns benefits that some companies will receive when hiring certain employees.
Rewarding permanent contracts
One of the main objectives of the new law is creating stable employment, as well as promoting the hiring of groups considered vulnerable and the long-term unemployed.
As such, companies that take on people like this will receive certain fixed tax deductions:
Long-term unemployed men under 45: €110 per month for three years.
Long-term unemployed women: €128 per month for three years.
Long-term unemployed and aged 45 or over: €128 per month for three years.
Hiring people with a certificate of social exclusion: €128 per month for four years.
Hiring victims of terrorism: €128 per month for four years.
Hiring women who are victims of gender violence: €128 per month for four years.
People with intellectual disabilities: €128 per month for four years.
People with permanent or absolute disability: €138 per month for two years.
Young people under 30 with low qualifications: €275 per month for three years.
READ ALSO: How a spike in permanent contracts is improving job security in Spain
Benefits coming to an end
As of September 1st, a series of benefits that are currently in force will also come to an end. One of these to go will be benefits for hiring family members (except for people with disabilities).
The hiring bonuses will also disappear for workers who have been in the same company for the last 12 months with a permanent contract, as well as for those who have been in the same company for the previous six months with a temporary or training contract.
In addition, the total rebate for contracts with unemployed workers for the replacement of workers due to maternity, fostering and adoption will end.
This benefit will be reduced from 100 percent to a flat €336 rate in two cases:
- For fixed-term contracts made to unemployed people under 30 years of age, to replace workers receiving economic benefits for risk during pregnancy or risk during breastfeeding.
- For fixed-term contracts for unemployed persons under 30 years of age, to replace workers receiving economic benefits for childbirth and childcare.
Other benefits to companies that will be reduced are those related to part-time contracts. In these cases, the amount of the bonuses will be reduced proportionally, while part-time contracts of less than 50 percent of the full-time working day will not be incentivised, except in cases of work-life balance leave.
READ ALSO: What are the types of work contracts in Spain and which one is the best?
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