Temporary Employment and Social Security in Spain
Temporary Employment in Spain
Temporary employment agencies (ETT) connect labor supply and demand. The ETT employs the worker and assigns them to a user company. The ETT pays the worker’s salary and receives a fee from the user company. The worker is integrated into the user company’s organization but has no direct contract with them.
The government regulates ETTs to guarantee the basic rights of the workers they hire. Authorization specifies conditions under which workers can be transferred to user companies, typically for temporary work. Temporary workers can only be assigned to another company through an ETT.
Jobs filled through ETTs are mostly low-skilled, often held by women and young people. It should be considered a temporary (not permanent) channel to seek employment. It can be a way to gain experience in a company and potentially secure a permanent position.
Reasons for ETT Legalization
- Proliferation of ETTs in Europe since the 1960s.
- Existing practice of worker assignment in Spain.
- High unemployment in Spain in the 1990s, creating a need for rapid placement of workers.
- Low-risk formula for user companies.
- Consideration as an employment policy mechanism.
- Decentralization of production: Main companies entrust auxiliary enterprises with phases of the production process (contracts, subcontracts, ETTs).
- Allows companies to adjust workforce size to the economic situation.
- Low-risk way to assess worker capacity before permanent recruitment.
However, there are drawbacks: precarious employment (temporary agency workers are subject to sectoral regulations), and potential for temporary excess if the company does not ultimately hire the worker.
Social Security in Spain
Social Security is a public system that protects individuals in situations of need, such as incapacity for work, retirement, sickness, widowhood, and orphanhood.
Protective Action: Benefits
Social Security provides protection through benefits, mostly economic. The aim is to compensate for lost income or increased expenses due to a situation of need. Key benefits include:
- Healthcare
- Temporary or permanent disability
- Retirement
- Maternity and risk during pregnancy
- Death and survival
- Unemployment
- Family benefits
Levels of Protection
Social Security offers two levels of protection:
- Contributory: For resident workers (employed and self-employed) exercising their profession in Spain. They acquire the right to contributory benefits through contributions made over a minimum period, along with other requirements (age, disability status, etc.). Financial need is not a requirement. The benefit amount depends on contributions made by the employee and employer.
- Non-Contributory (Assistance): For those who have not contributed or have not contributed long enough to qualify for a contributory benefit. Financial need and other requirements apply.
The contributory level covers more situations, and the amount of protection is generally higher, as beneficiaries have previously contributed. There is a potential disincentive effect of welfare protection.
Additional Protection
The Social Security system is public, general, and compulsory, although private participation in coverage development may exist. Individuals can supplement Social Security with voluntary private protection systems, such as private insurance, pension funds, etc.
Powers Related to Social Security
The State has primary responsibility for Social Security, including scope, affiliation, contributions, collection, management, licensing, and inspection. Autonomous Communities (CCAA) have limited regulatory power, mainly complementing aspects of legislation and service management. The economic regime of Social Security is the exclusive competence of the State.