A Royal Decree Law (16/2013) that came into force on 22 December 2013, amends certain provisions of the Spanish Workers’ Statute by introducing additional flexibility when hiring part-time employees. It also introduces significant amendments to social security regulations, as a consequence of which some salary items that were previously excluded are now subject to social security contributions.
- The reforms provide employers with greater flexibility: the parties may now agree on the performance of ‘supplementary hours’ (to enable the employer to better adapt employees’ working hours to business needs) and the advance notice required when requesting an employee to work supplementary hours has been reduced.
- Contributions payable by employers to the social security system to cover their part-time temporary employees in respect of public unemployment protection has now been reduced by 1% (from 7.7% to 6.7%).
- Employers will from now on have to make social security contributions on behalf of their employees to cover some benefits that were previously totally or partially excluded from such contributions. The most significant benefits affected by the new regulation are set out below:
- Transport allowance: this is now subject to contributions whereas in the past up to €106.50 per month was excluded from contributions;
- Employer contributions to pension plans: the whole amount will be subject to contributions;
- Share option schemes: this is now subject to contributions, whereas previously a maximum of €12,000 per year was excluded from contributions;
- Life and medical insurances: the cost paid by the employer will be subject to contributions for social security purposes;
- Meal allowances/lunch vouchers: these will now be subject to contributions whereas in the past €9 per day was excluded from contributions; and
- Scholarship and nursery allowances: amounts paid by employers will be subject to social security contributions.
Whilst the amendments took effect from 22 December 2013, during the transitional period that ends on 31 May 2014, employers will not incur surcharges for late payment in respect of the new contribution requirements.
Actions for employers
Employers should take into account the Royal Decree Law when entering into collective negotiation processes as the cost of social security contributions may increase as a result of the new regulations.