This article summarises the most important developments anticipated in Spanish employment law in 2019.
Three laws, Royal Decree‐Law 26/2018 (Official Spanish Gazette ‘Boletín Oficial del Estado’ BOE 29/12/18), Royal Decree‐Law 28/2018 (BOE 29/12/18) and Royal Decree 1462/2018 (BOE 27/12/18) made changes to the law on pensions, contributions, benefits, minimum interprofessional salary and other labour and social matters. Below is a brief description and explanation of some of the more significant changes.
1. Pensions and public benefits
Contributory and civil service pensions have increased 1.6% from 2018.
The maximum public pension limit also increased from EUR 2,580.13 per month to EUR 2,659.41 in 2019. In annual terms, the limit increased from EUR 36,121.82 in 2018 to EUR 37,231.74 in 2019.
In order to maintain the purchasing power of pensions, recipients of pensions that were revalued in 2018 will be compensated in 2019 with a single payment for an amount equivalent to the difference between the pension received in 2018 and the pension that would have been received if the increase in the Consumer Price Index were applied.
2. Social security contributions
The maximum social security contribution base for contributions to the General Social Security System increased from EUR 3,803.70 in 2018 to EUR 4,070.10 in 2019.
The contribution bases under the Special Contribution System for Domestic Workers (defined as workers who provide paid services in a domestic setting) will vary in 2019 according to the following table:
* Gross monthly salary includes the proportional part of any special payments
Contribution rates under the special contribution regime will be adjusted to the rates applied under the general contribution system, i.e. 28.3%. Of this amount, 23.6% corresponds to the head of household and the remaining 4.7% to the domestic worker.
Changes were also made to the special regime for self‐employed workers as follows:
- The primary change affecting self‐employed workers is a change in mandatory coverage. Some elements of coverage that were previously optional are now mandatory (e.g. coverage for professional contingencies, cessation of activities, continued education).
- The maximum contribution base has increased from EUR 932.70 in 2018 to EUR 944.40 per month in 2019.
- Self‐employed workers who are 47 years old as of 1 January 2019 may opt for a maximum base of EUR 2,077.80 if their previous contribution base was less than EUR 2,052.00, unless they opt for a higher base before 30 June 2019 or in the event that a self-employed worker is the surviving spouse of the owner of the business who died and had to assume the business and register with the self-employed social security regime at 47.
- Self‐employed workers who are 48 years old or older as of 1 January 2019 may choose a contribution base of between EUR 1,018.50 and 2,077.80 per month.
- Self‐employed workers who have made contributions under any of the regimes in the Spanish social security system for at least five years before their 50th birthday, provided their most recent contribution base was less than or equal to EUR 2,052 per month, can choose a contribution base between EUR 944.40 and 2,077.80. If the most recent contribution base was greater than EUR 2,052 per month, the base can be between EUR 944.40 and a maximum base equal to the previous contribution base plus 7% (capped at the total maximum contribution base).
- A maximum contribution of EUR 13,822.06 annually is established for common contingencies (including employer and worker contributions) for self‐employed workers who have simultaneously paid in to the general regime for employed workers. Workers who pay more than this amount are entitled to a refund of 50% of the excess amount paid.
- The minimum contribution base for self‐employed workers who simultaneously employed ten or more employees at any time during 2018 will be equal to the minimum base for workers included in contribution group 1 of the general regime, that is, EUR 1,214.10 per month in 2019.
- The minimum contribution base for incorporated self‐employed persons (autónomos societarios) will be EUR 1,214.10 per month.
- Contribution rates for 2019 are set out below:
These rates are expected to continue increasing through 2022.
3. Reductions in contributions for low accident rates are suspended
This suspension will remain in effect until the Government amends Royal Decree 231/2017 (expected in 2019).
4. All interns will now be subject to contributions even if unpaid
The completion of an internship at a company, institution or organisation as part of a training program, including non‐labour internships (a specific subset of training internships that are legally regulated and for which specific legal requirements must be complied with) in companies and external academic internships, will require the intern to be included in the social security system, even if they are not compensated.
5. Conditions for mandatory retirement
Collective bargaining agreements can now include clauses allowing for termination of an employment contract once the worker has reached the legal retirement age established in Social Security regulations, provided the following requirements are met:
- The worker affected by termination of the employment contract must comply with the requirements set out in social security regulations to be entitled to receive 100% of the ordinary contributory retirement pension.
- The measure must be linked to coherent employment policy objectives as expressed in the collective bargaining agreement, for example, improving employment stability by transforming temporary contracts into permanent contracts, hiring new workers, generational change or any other objectives aimed at improving the quality of work.
6. Amendments to the General Social Security Act
As previously mentioned, contributions by self‐employed workers for all contingencies have become mandatory.
Coverage for self‐employed workers has been improved in some respects, notably:
- Protection for cessation of activities has been increased from 12 to 24 months.
- Where a temporary incapacity triggering a right to benefits exceeds 60 days, contributions will be paid by the mutual fund, managing entity or, if appropriate, the public employment service responsible for payments for cessation of activities.
Temporary contracts with a term of fewer than five days will be penalised with a 40% increase in contributions for common contingencies.
7. Changes to the contributory regime for artists
Artists in public shows can still be included in the general social security regime during any periods of voluntary inactivity, provided they can prove that they effectively provided services for at least 20 days in the preceding calendar year. Payment for these days must exceed three times the Minimum Interprofessional Salary (in monthly terms).
A new regulation that would replace Royal Decree 1435/1985 on special labour relations for artists in public shows is expected to be approved before 29 June 2019.
8. Minimum Interprofessional Salary
The minimum interprofessional salary for 2019 is set at EUR 30 per day (gross) or EUR 900 per month over 14 payments (EUR 12,600.00 per year).