Modern economy requires flexible relationships between companies and individuals, which challenges the traditional structure of Spanish Employment Law. As a result, the border between employees and independent contractors is no longer clear. Under Spanish Law, the main characteristics of an employment relationship are as follows:
- The employees voluntarily render services to the employer, who assumes the risks associated with the business.
- The employees must receive a salary for their work.
- The employees render services under the instructions of the employer and within the employer's organization, which means that the employer organizes the work of the employee (vacations, schedule, etc.) and is also entitled to implement disciplinary employment measures.
By contrast, independent contractors, acting as self-employed workers, render services on their own behalf, assuming the risks of their activity and outside the organizational power and control of the client. In principle, these self-employed workers are not entitled to the same rights as employees regarding vacations, minimum wage, working time limits, termination severance payments, etc.
Nowadays, as a result of the growing flexibility demanded by the economy and the market, there are many relationships which do not clearly fall under the two categories above, such as the relationships held by certain consultants, taxi drivers rendering services to a taxi owner, technical maintenance personnel and many others. These professionals usually use their clients' assets, tools and resources to render their services and, very commonly, they render services in their clients' premises. Furthermore, many of these professionals are very dependent on only one client, since most of their activity is devoted to one client who, therefore, becomes the main source of the professional's income. In the end, it is not crystal clear whether these professionals actually assume the risk associated to their activity or if they are actually under the control and organization of their clients – this must be analysed on a case-by-case basis according to Spanish case-law.
In this scenario, in order to protect those professionals who are self-employed workers and are, at the same time, very dependent on one client (but cannot be considered employees), Spanish Law came up with a new legal concept called the "Economically Dependent Self-employed Worker" (trabajador autónomo económicamente dependiente) in 2007. Under Spanish Law, if 75% of the self-employed worker's income is paid by one client, the self-employed worker will be considered economically dependent (provided other requirements are met). As a consequence, the economically dependent self-employed worker will be entitled to some rights which typically correspond to those of employees, such as a period of interruption of their services or holidays.
Finally, it is important to note that a self-employed worker, whether economically dependent or not, who should in fact be considered an employee under Spanish Law, would be entitled to the same rights and benefits as employees, which include a severance payment in case of dismissal. Moreover, if a self-employed worker is reclassified by a Labour Court or by the Labour Inspectorate as an employee, the client/employer would have to pay the unpaid Social Security contributions corresponding to the previous four years and it could also be subject to fines for serious infringements of Labour and Social Security Law.