Spanish Employment Contracts: Types & Formalities
Types of Spanish Employment Contracts
Contract for Circumstances of Production
A mode of contract whose object is to meet the situational demands of the market, work, or excess accumulation of orders which are part of normal business activity.
Interim or Substitution Contract
A contract intended for substitution (with the right to keep the workplace) or to temporarily fill a position during the selection process for permanent coverage.
Training Contract
A contract intended for the acquisition of theoretical and practical training necessary for the proper performance of a trade or a job that requires a certain level of qualification.
Work Experience Contract
A contract mode that seeks to provide professional practice related to an individual’s studies.
Contract Formalization Process
Once the most appropriate contract model has been chosen, it is necessary to notify the labor authority. To do so, take into account the following:
- The contract must be formalized in duplicate; one copy will be held by the employee and another by the employer.
- The contract should be communicated to worker representatives through a basic or simple copy. This can be a duplicate of the employment contract that omits personal data that may infringe upon the worker’s privacy, or a summary document containing the basic information of the employment contract.
- Communication must occur within a period not exceeding ten days from the conclusion of the contract.
- Communication can be made in person at the office of the regional employment service or through the Contrat@ computer application.
Social Security: Affiliation and Registration
Affiliation: This is the incorporation into the Social Security system for the first time. It is done when an individual has never worked before. Affiliation can occur in three ways:
- At the request of the employer.
- At the request of the worker.
- By the Labor Inspectorate (Inspección de Trabajo).
Affiliation is processed at the General Treasury of the Social Security (Tesorería General de la Seguridad Social – TGSS) and must be completed before starting the employment relationship.
Registration (Alta): When the employee is already affiliated with Social Security, the process to be carried out by the employer is the registration (ALTA). This process is also performed at the General Treasury of the Social Security and must be done before starting the employment relationship.
Any changes or cancellations (bajas) must be communicated to Social Security within 6 days. Communication with Social Security can be done through the RED System application.
Employer Obligations in Labor Relations
When establishing a labor relationship, the employer must:
- Pay wages to the employee.
- Make contributions to Social Security.
- Make withholdings for personal income tax (IRPF) from employees’ salaries.
Social Security Contributions
Contributions to Social Security include:
- Employer’s contribution: Paid by the employer.
- Worker’s share: Paid by the employee (deducted from their payroll or salary receipt).
The employer will liquidate the total amount of worker and employer contributions to the General Treasury of the Social Security in the month following the corresponding accrual period. The documents used are:
- TC2 (Relación Nominal de Trabajadores): Nominal list of workers, including data for all workers with their corresponding contribution bases.
- TC1 (Boletín de Liquidación de Cotizaciones): Contribution payment document, which details the various fees, bonuses, and rebates, and includes the result of the liquidation.