Payroll compliance checklist in Spain

Payroll compliance refers to how companies follow the laws in Spain regarding employees. Companies that fail to follow these regulations could face fines, audits, lawsuits and other penalties for non-compliance. Some regulations apply to companies with just one employee. Others apply when you have 50+ employees.

Payroll compliance in Spain is frankly, a lot of work: Spain could well be the country in the world with the highest bar to payroll compliance. Spanish employees are aware of the laws. If one employee notifies social security about non-compliance, you can expect a labor inspection.

This list summarizes the key payroll compliance obligations for your company for 2024:

• Occupational risk prevention (PRL) medical examination certificate

• Time controls or working day registers

• Salary Registry

• Accessible work calendar

• Harassment protocol

• Remote (“telecommuting”) employees

• Data protection and guarantee of digital rights

• Equality Plan

• LGTBI+Q measures

• Employment reserve for workers with disabilities

Spain enforces a comprehensive set of work obligations to ensure the safety, rights, and equality of workers across various sectors. These obligations, mandated by a series of laws and regulations, encompass a wide range of areas, from occupational risk prevention to equality measures.

Here's an overview of the key work obligations in Spain for the year 2024:

Occupational risk prevention (PRL) with medical examination certificate

Mandated by the Prevention of Occupational Risks Act (Ley Prevención de Riesgos Laborales)

This requirement applies to all companies and employees without exception. It is mandatory for employees. This requirement can be conducted by an external professional or managed internally. However, self-management of this obligation is permitted only for companies with fewer than 10 employees that do not engage in hazardous activities.

According to article 14 of the RSP, the employer must establish an in-house prevention service when any of the following situations occur: companies with more than 500 workers, companies with 250 to 500 workers engaged in any of the activities listed in Annex I of the RSP, or when the labor authority decides so.

PRL obligations encompass:

• Risk assessment
• Development of a comprehensive risk prevention plan
• Provision of training to all employees based on identified risks

Regular monitoring of the physical and mental health and fitness of employees to ensure their ability to perform their duties effectively.

• Additionally, it is crucial for companies to maintain accident medical insurance as required by any relevant agreements or regulations

Non-compliance: Violations shall incur the following sanctions:

• Minor infractions will result in fines ranging from €45 to €485 for the lowest degree, €486 to €975 for the medium degree, and €976 to €2,450 for the maximum degree.
• Serious offenses will incur fines starting from €2,451 to €9,830 for the lowest level, €9,831 to €24,585 for the medium level, and €24,586 to €49,180 for the highest level.
• Very serious infringements will lead to fines ranging from €49,181 to €196,746 for the lowest degree, €196,746 to €491,865 for the medium degree, and €491,866 to €983,736 for the maximum degree.

Upon finalization of penalties for very serious infringements, they shall be publicly disclosed in accordance with regulations. Violations regulated in Article 40.2

Time controls or working day registers

These measures are designed to ensure accurate tracking of work hours and promote fairness and stability in employment practices. Included in the Royal Decree “Urgent measures for social protection and the fight against job insecurity in the working day” Real Decreto-ley 8/2019, de 8 de marzo

This requirement applies to all companies and workers without exception. It entails the daily recording of working hours, commonly referred to as "fichaje", which can be entered (digitally or via a physical document) by each employee at the beginning and end of the workday. Additionally, in compliance with this obligation, employers are required to retain these time records for four years, accessible to both the labor inspectors and to the workers themselves.

Non-compliance: Failure to maintain accurate time records incurs penalties classified as minor, serious, and very serious, with fines ranging from €40 to €6,000 for each violation. Modifications to the penalties for time record violations are detailed in Article 10 of RDL 8/2019, with sanctions referenced to the amendment of Article 7.5 of the Law on Infringements and Sanctions in the Social Order, as approved by Royal Legislative Decree 5/200. RDL 5/2000 del 4 de agosto Ley de Infracciones y Sanciones en el Orden Social.

Salary Registry

It is mandatory for companies with even a single employee to maintain a salary registry, necessitating an internal audit and the formulation of a remuneration plan. This registry can be in the form of a simple spreadsheet or payroll software. This registry must be readily available for review by regulatory authorities to address wage disparities.

This requirement applies to all companies and employees. Since April 14, 2021, it has been mandatory to maintain a registry containing comprehensive information about the company's workforce, including gender, professional category, job positions, and corresponding pay. Additionally, managers, administrators, and partners must be included in this register whether they receive a salary, dividends, or any form of bonus. Equality remuneration Royal Decree

Non-compliance: Specific fines or sanctions for non-compliance are not explicitly stated; however, the Law on Infractions and Sanctions in the Social Order, as approved by Royal Legislative Decree 5/2000, applies. This legislation outlines the violations and corresponding sanctions. Violations and Sanctions Royal Decree 5/2000

Accessible work calendar

According to articles 34.6 and 38.3 of the Workers' Statute, companies are obligated to maintain a comprehensive work calendar consistent with legal requirements. This calendar must be accessible to all employees and include schedules, public holidays, vacation days, and absences.

This obligation applies universally to all companies and workers. The work calendar must be prominently displayed in a location easily accessible to all employees.

Non-compliance: Failure to uphold this requirement may result in the imposition of common sanctions outlined in the Law on Infractions and Sanctions in the Social Order, as specified by Royal Legislative Decree 5/200. Violations and Sanctions Royal Decree 5/2000

Harassment protocol

Governed by Law 31/1995 of November 8, 1995, on Occupational Risk Prevention, which recognizes harassment based on sex as a psychosocial risk, all companies and workers, regardless of size, are mandated to prioritize physical and mental health and safety in this domain. Additionally, Organic Law 3/2007 of March 22, 2007, on Effective Gender Equality, emphasizes that harassment based on sex and gender constitutes discriminatory behavior.

This obligation applies universally to all companies and workers. A harassment and mobbing prevention protocol must be established, either internally or by a third-party professional entity. It should encompass a strategic plan for equal opportunities, periodic reporting, and gender impact assessments. Moreover, all employees are subject to mandatory annual training on this matter.

Non-compliance: Failure to implement a workplace harassment protocol can result in significant administrative sanctions following inspections with unfavorable outcomes. For very serious violations, fines range from €7,501 to €225,018, as stipulated in Royal Legislative Decree 5/2000 of August 4, 2000,on Infringements and Sanctions in the Social Order. Furthermore, Organic Law 3/2007 of March 22, 2007, on Effective Gender Equality, introduces accessory sanctions, including the automatic loss of aids, subsidies, and benefits derived from employment programs, effective from the date of the infringement, as well as automatic exclusion from accessing such benefits for six months, as outlined in Article 46 bis

Remote (“telecommuting”) employees

Following the enactment of Law 28/2020 on Distance work on September 22, 2020, all companies employing staff working offsite, provided that they account for at least 30% of the monthly working hours over a three-month period, are required to register with the Public Employment Service. This obligation applies to all companies, regardless of size, that have at least one remote employee.

Non-compliance: Although specific fines or sanctions are not outlined, non-compliance is subject to the Law on Infringements and Sanctions in the Social Order, as stipulated by Royal Legislative Decree 5/2000 of August 4, 2000, on Infringements and Sanctions in the Social Order.

Data Protection and Guarantee of Digital Rights

Ensuring data protection and safeguarding digital rights is deemed a fundamental right for all companies and workers, as enshrined in Organic Law 3/2018 of December 5, 2018, on Personal Data Protection and Guarantee of Digital Rights. This regulation applies universally to all companies, including those with a single worker, as well as to sole proprietors and administrators. Its applicability extends broadly, encompassing freelancers and professionals.

Non-compliance: Fines for infringements under this regulation range from €40,000 to more than €300,000 for very serious violations.

Equality Plan

Organic Law 3/2007, Article 46, introduced measures promoting equality for the first time. Subsequently, the Law enacted on March 8, 2022, mandates companies with more than 50 employees to implement an equality plan within their organization. This plan includes mandatory annual equality training and encompasses:

• Preliminary analysis with diagnosis
• Plan development and implementation
• Equality training

Chapter III, Article 45 et seq., regulates equality plans and other measures for equality promotion under Organic Law 3/2007 for effective gender equality.

Non-compliance: Failure to comply with the equality plan mandate incurs penalties categorized as follows:

• Minimum: €7,501 to €30,000
• Medium: €30,001 to €120,005
• Maximum: €120,006 to €225,018

LGTBI+Q

Ley 4/2023 enacted on February 28, 2023, ensures real and effective equality for lesbian, gay, trans, bisexual, intersex, and queer individuals. The company is obligated to implement measures and resources concerning LGTBI matters within one year of hiring 50 employees or more. This includes the adoption of a harassment protocol agreed upon with legal representatives of the workers.

Non-compliance: Penalties for non-compliance can reach up to €150,000, depending on the seriousness of the offense.

Employment Requirement for Workers with Disabilities

Legislative Royal Decree 1/2013, enacted on November 29, establishes that for companies with 50 employees or more, at least 2% of employees in the company must be people with disabilities accredited by the social security office. This 2% is calculated for the total workforce of the company, regardless of the number of work centers or employment contract types.

Non-compliance: Specific fines or sanctions are not mentioned, thus the Law on Infringements and Sanctions in the Social Order, as approved by Royal Legislative Decree 5/2000, applies.

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