On March 1, 2014, the Official State Gazette published Royal Decree-Act 3/2014, dated  February 28, on urgent measures to promote employment and indefinite term employment contracts.

The regulations are aimed at promoting employment and indefinite employment contracts by implementing a reduced monthly contribution quota payable by companies (also called a "fixed rate") of EUR 100 for common contingencies. The measure is temporary, applies to indefinite contracts signed between February 25 and December 31, 2014 and will have an initial duration of 24 months (extendable for a further 12 months in certain circumstances).

Companies will therefore be able to significantly reduce their staff expenses. For workers with gross salaries exceeding EUR  43,000 per annum, the approximate savings will be EUR 18,000  (and up to EUR 23,000 for companies with fewer than 10 workers).

The attached document is an analysis of the specific requirements and features of the fixed rate system. View document here.