Social Security Payments Spain

Job contracts for new staff at all firms will carry a flat rate of €100 a month in Social Security payments made by the employer on behalf of the employee, was approved by the Congress last week.

This type of contract will only be available for companies taking on extra staff and expanding their payroll, not replacing those who have left, in order to prevent unscrupulous bosses from finding reasons to fire existing employees so that they can substitute them with new ones and pay lower Social Security.

The €100 a month Social Security will continue for the first two years of the new staff member’s time with the firm, provided the contract is a fixed, or ‘indefinite’ one rather than for a temporary placement. You will have to add also withholding taxes, which the amount will be related with the salary and about €80 for unemployment and other things.

Bosses must keep each of these employees on for a minimum of three years, or they will have to refund the extra Social Security they would normally have paid.

This is designed to act as an incentive to companies to provide job security, something which is sorely lacking now Rajoy’s labour reform is in place.

The new system does not allow firms to get rid of staff after three years and take on new workers to fill their places in order to benefit from lower contributions, since this will not happen – they will only be entitled to the reduced payments for additional workers on top of those they already have.

I would like to inform you also, according to the 31/95 LABOUR RISKS PREVENTION LAW, that every enterprise has to:

  • Do a Risk Assessment and Preventive Planning
  • Provide formation to their employees
  • Make an Emergency Plan

The failure to obey these obligations involves economic sanctions from €2,046 for serious offences, to €601,012 for very serious offences. If there is a serious accident or an employee dies as a consequence of precarious work conditions, the company could have public and penal liabilities.