Hire and manage employees in Spain

Employer of Record (EOR) vs. entity

The first step is deciding whether to hire your Spanish employees via an EOR or through your own entity.

• Legal entity in Spain. This entails registering with local authorities (such as the Spanish Tax Agency and National Social Security Institute), obtaining an NIF tax ID code, opening a local bank account, notarizing documentation, and seeking advice from local experts to ensure adherence to tax and labor regulations, among other tasks.
• Spanish EOR services. These function as an employer on behalf of a company, eliminating the need to establish a separate entity. EORs enable companies to hire full-time Spanish employees while handling all legal obligations related to payroll, contracts, benefits, and the complexities associated with collective bargaining agreements (CBAs).

Your company’s resources, size, and plans to scale will all impact your decision in choosing between an EOR or your own entity. Here are the pros and cons of each:

After deciding, you can start with onboarding by collecting your employee’s information (name, birthdate, date of hire, contact info, and bank information).

To thoroughly understand the steps to hiring through an EOR in Spain—and learn how Rippling can help you hire and onboard Spanish employees in 90 seconds—read our guide.

Classifying Spain workers: employees vs. contractors

If you're considering hiring employees in Spain, it is crucial to accurately classify them to avoid potential fines and penalties. Spain boasts stringent employee protections and collective agreements are widespread. The term "falso autónomo" is used to describe "fake freelancers" who may be classified as contractors but function as employees. Spain has taken strict measures against the misuse of falso autónomo employment arrangements.

This table outlines some of the ways Spanish law distinguishes between employees and contractors:

To learn more about how to classify your Spanish workers correctly and maintain compliance with Spanish labor and employment laws, see our classification guide.

Work permits for Spanish employees

Prior to making your initial hire in Spain or relocating an existing employee there, it’s important to consult our comprehensive guide. It covers essential information such as determining the need for a work visa, the application process, and common inquiries regarding work permits for employees in Spain. It’s crucial to note that employing individuals without proper authorization is illegal in Spain and can lead to severe consequences, including fines, imprisonment, or even a prohibition on hiring foreign workers.

The Spanish government offers various types of work permits, including:

• Type A work permit. Designed for seasonal or limited work, with a maximum duration of nine months, including renewals.
• Type B initial work permit. Allows work in a specific occupation and geographical area for up to one year, with the possibility of renewal for a type B renew work permit, extending the permit to a maximum of two years.
• Type C work permit. A renewal of the type B permit.
• Permanent work permit. Available after the expiration of the type C visa, allowing individuals to apply for an unlimited duration permit, although renewal is still required every five years.
• Extraordinary permit. Granted to non-EU citizens who have contributed to the economic and cultural progress of Spain.
• Type F permit. Intended to work at Spanish borders while returning to one’s country of origin.
• EU Blue Cards. Similar to the Green Card in the US, these are for highly skilled, highly educated non-EU citizens with desirable professional experience, granting permission to work in nearly any European country.

For all the details, including how to apply, see our guide to work permits in Spain.

New hire onboarding checklist

After confirming your employee's legal eligibility to work in Spain, you can proceed with their onboarding process, which presents an opportunity to establish a strong foundation for a satisfying employment journey.

Remember that a successful onboarding experience extends beyond the employee's initial day, encompassing various aspects beyond payroll and benefits. Consider the following guidelines for each stage of the onboarding process:

Before their first day

• Complete an employment background check. 
• Send an offer letter (more on that in the next section).
• Complete the necessary paperwork (including non-disclosure agreements, legal agreements, and tax forms).
• Enroll your employee in benefits.
• Add them to payroll. 
• Order and prepare their devices. 
• Schedule their orientation.

On Day 1

• Make sure their workspace is ready. 
• Send a welcome email. 
• Send them an agenda. 
• Designate an onboarding buddy or mentor. 
• Give them an office tour. 
• Provide them with a list of important contacts.

During their first 90 days

• Schedule training. 
• Assign work and help them set goals. 
• Schedule regular check-ins. 
• Seek their feedback on how to improve the experience.

For a complete list of onboarding musts, see our guide to onboarding new hires in Spain.

What to include in an offer letter in Spain

Offer letters are an essential part of hiring. They’re also a great way to set the tone for the employment relationship. Here’s a simple checklist of what to include:

• Position, job description, and job duties
• Start date and working hours
• Probationary period
• Compensation and benefits
• Vacation leave policy
• Payment frequency
• Termination policy
• Confidentiality and non-disclosure agreements
• Contact information
• Non-compete and non-solicit agreements

Get all the details on sending a legally compliant offer letter in Spain in our full guide.

NDAs and confidentiality agreements in Spain

A non-disclosure agreement (NDA) is a legally binding contract that restricts one or more parties from disclosing proprietary or confidential information to third parties. In a workplace context, these written agreements are commonly employed to safeguard a company's trade secrets and other sensitive data from competitors. NDAs, also referred to as confidentiality agreements, are frequently signed by employees, contractors, and consultants associated with the company. Additionally, prospective business partners or merging companies may also enter into NDAs to ensure confidentiality.

In Spain, there are two types of NDAs you’re most likely to encounter:

• Mutual NDAs, also called bilateral or two-way NDAs, obligate parties within the agreement to share specific information exclusively among themselves, excluding any external parties. Such NDAs are commonly utilized in mergers, acquisitions, and similar business transactions.
• Non-mutual NDAs, also known as unilateral NDAs, operate in a single direction, requiring one party to handle sensitive information without disclosing or disseminating it to others. These types of NDAs are more prevalent in employer-employee relationships and are typically signed by new employees upon hiring.

Learn more about the different types of NDAs and their essential components in our guide to NDAs in Spain.

Running background checks on Spanish employees

Understandably, you may be eager to fill your position speedily. That said, it’s important to not skip over the background check portion of the onboarding process.

In Spain, depending on the role of a new hire, various types of background screenings can be conducted. The following are some of the most common and less common:

Understand the details of the different types of background screenings you can run—and the ones you can’t—in our guide to background checks in Spain.

Paying employees in Spain

In addition to choosing between an EOR or your own entity, you’ll need to select a payroll solution. 

Once you’ve made a decision, follow these steps:

• Make sure your employees are correctly classified.
• Collect employee information, like name, date of birth, date of hire, contact, and bank information.
• Input the payment amount in EUR—or get written permission from the employee if you’re planning to pay them in a different currency.
• Ensure you’re adhering to statutory requirements when calculating payroll deductions.
• Run payroll.

Because you’re responsible for calculating payroll deductions, you should keep the following costs in mind:

Looking for a full rundown on paying employees in Spain? Check out our step-by-step guide.

Mandatory employee benefits in Spain

When hiring employees in Spain, it’s essential to provide benefits packages that align with the country's labor laws, as dictated by the European Union, Spanish Constitution, Workers' Statute (Estatuto de los Trabajadores), and collective bargaining agreements. Although Spanish workers already receive various benefits through the social security system and government support programs, employers must also fulfill their obligations. Mandatory benefits include: 

• Statutory holidays. In Spain, employees enjoy 14 days of paid public holidays, including both national and local holidays, with the practice of taking off the following Monday if a holiday falls on a weekend.
• Leave. Spain has very specific laws for leave which may change per collective bargaining agreements. This includes paternity, maternity, sick leave, and more.

To learn how to go above and beyond when offering benefits to your Spanish employees, read our full guide on meeting statutory requirements.

Managing remote employees’ computers and apps

The emergence of remote work has led to new possibilities for hiring talent worldwide, but it has also given rise to unprecedented challenges in managing devices for remote employees. Everything from shipping devices to configuring and updating them from a distance must be considered and accounted for.

You need to ensure that your employees are set up for success with the apps, tools, and integrations they need—and that you can manage them. With Rippling:

• You can seamlessly set up and secure employees’ accounts, ensuring they have the access and permission they need.
• You have an all-in-one place to set up, manage, and disable employee apps like Google Workspace and Slack. 

See our guide to better understand how to set up and manage remote employee devices.

Protecting company IP in Spain

Protecting your intellectual property (IP) can make all the difference between losing ground and staying ahead, particularly when aiming to expand your operations on a global scale.

Spain has several categories for protected works including:

• Industrial property protection which encompasses patents, trademarks, utility models, design rights, trademark registration, trade names, patents, utility models, and industrial design.
• Intellectual property rights which include copyright.

For more on intellectual property rights, check out our primer to IP ownership and rights in Spain.

Complying with Spanish labor laws

Arguably the most crucial aspect to consider when hiring in Spain is compliance with Spanish labor laws. Failure to comply can have severe consequences, including substantial fines and penalties.

See our guide for the most important Spanish labor regulations, including:

• Job regulations vary by industry, with each professional category having its own laws regarding working hours, vacation time, and compensation.
• Spanish workers have generous vacation entitlements. Full-time workers in Spain get 30 paid days of vacation per year.

Spain has strict laws around data protection for workers. Employees are protected from being unfairly monitored through the EU’s General Data Protection Regulation (GDPR) and Spain’s Data Protection Act.

Terminating employees in Spain

Employment law in Spain is very strict when it comes to dismissals. They need to be based on objective grounds and most cases also require notice periods and severance pay.

In Spain, the employer must provide written notice to both the affected workers and their representatives (HR and the union) to terminate an employment contract. However, if the termination is the result of disciplinary issues, the employer does not need to provide a notice or severance pay. To ensure you fully understand the ins and outs of terminations in Spain, read our full guide.

Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.