From pay transparency to worker protections: Spain's latest employment law developments

Legislation updates

Pay transparency getting closer

The Government is progressing with the transposition into Spanish law of the European Pay Transparency Directive, which will require Spanish companies to abolish pay secrecy and comply with a new set of obligations, such as the disclosure of salary information from the recruitment stage, the review and objective justification of pay differentials, and regular reporting of pay gaps, in accordance with the applicable legal framework.

Failure to comply with these requirements may give rise to significant consequences, including administrative fines, liability for the full payment of unjustified pay differences, and exclusion from public procurement procedures.

How should companies act in relation to trans employees? New support protocol

This new protocol sets out the framework governing how a company must act where an employee initiates a gender transition process. 

Among other obligations, employers are required to ensure full respect for the employee’s gender identity, adapt internal organizational arrangements (including identification documents, internal records and the use of workplace facilities), facilitate leave for medical appointments or administrative procedures, and safeguard confidentiality while preventing any form of discrimination.

Expanded options for hiring foreign workers

The new Immigration Regulation broadens the available pathways for employing foreign workers by allowing employment to commence from the moment residence and work permits are applied for. It also introduces new categories of residence authorization on exceptional grounds and expands the options for the modification and renewal of existing permits, thereby creating additional opportunities for companies facing difficulties in filling vacancies.

Additionally, the new framework requires employers to review their recruitment policies, as the pool of legally available candidates is expanded while controls and enforcement measures against irregular employment are strengthened.

New obligations on occupational risk prevention

The Council of Ministers has approved a draft bill which thoroughly reforms occupational risk prevention regulations. The text has been submitted to Parliament to begin its legislative process as a bill.

The regulation extends the protection of workers and incorporates new risks, particularly psychosocial, climate-related and those linked to digitalization. It also requires work to be adapted to each individual’s circumstances (for example, following long-term sick leave) and explicitly mandates the prevention of harassment and violence, including in digital environments.

In practice, companies will need to review their prevention systems and protocols to avoid potential non-compliance with the new requirements regarding training, health surveillance and preventive organization.

Relevant news

Trade unions push for tighter dismissal rules

UGT and CCOO have submitted to the Government a proposal to reform the dismissal regime, which would involve increasing statutory severance payments, allowing higher compensation based on the actual harm suffered, and reinstating back pay for the procedural period (salarios de tramitación). These measures would significantly increase the cost of terminating employment contracts. In addition, the unions propose restricting dismissals during the probationary period and allowing employees to choose between reinstatement or compensation in cases of unfair dismissal.

Although these are proposals currently under negotiation, their potential approval would constitute a material change to the existing legal framework governing terminations.

Government considers reviewing the statutory minimum wage within six months

The Ministry of Labour has raised the possibility of reviewing the Statutory Minimum Wage (Salario Mínimo Interprofesional – SMI) within a six-month timeframe should there be a rise in inflation.

The Government’s stated intention is to move towards a more flexible updating mechanism that would allow the SMI to be reviewed during the year, in line with price trends. This would lead to greater uncertainty as regards the evolution of labour costs, while at the same time increasing pressure on employers to adjust wage structures.

Recent case law

Remote working as a reasonable adjustment for mental health reasons

Recent case law has reinforced that employers may be under an obligation to allow remote working where this constitutes a necessary adjustment of an employee's role on health grounds.

The High Court of Justice of Cantabria clarifies that a long-term illness may, in certain cases, be treated as equivalent to a disability for the purposes of anti-discrimination legislation. Where this threshold is met, employers may be under an obligation to allow remote working if it constitutes an appropriate measure to adapt the role and does not impose a disproportionate or undue burden on the organization. 

A refusal to permit remote working in such circumstances may expose employers to discrimination claims.

The Supreme Court orders a review of rest periods and work shifts

Weekly rest periods must not overlap with daily rest periods. The Supreme Court has warned that many working-time schedules may be unlawful where they fail to guarantee the legally required number of actual and consecutive rest hours, particularly in shift systems, extended working weeks or arrangements where rest periods are offset at a later stage.

As a result, employers are required to review how working time and shift patterns are organised to avoid breaches of the applicable rules and the risk of related financial claims.

Limits on employers in managing leave to care for family members

Employers may not require the five-day paid leave for the care of family members (Article 37.3(b) of the Workers’ Statute) to start mandatorily on the day on which hospitalization, serious illness or a medical procedure occurs.

According to the Supreme Court, unless expressly provided for by statute or the applicable collective bargaining agreement, the start date of the leave must be interpreted flexibly and in line with its caregiving purpose. 
 

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