Employee or contractor? How to (legally) classify workers in Spain
How do you employ in Spain within the law? If you’re expanding to the country (or there already), you must understand Spain's different types of workers and contract classifications. So, let’s break them down one by one while clarifying probation periods, misclassification penalties, and overtime rules.
What you’ll learn:
Worker classification in Spain: Employed vs. Self-employed vs. Contractors
What is an employee in Spain?
What are the different types of employment contracts in Spain?Other types of workers in Spain: self-employed and contractors
What is a self-employed worker in Spain?
What is a contractor in Spain?
Understanding contractors in Spain
False freelancer law in Spain
Worker classification in Spain: Employed vs. Self-employed vs. Contractors
In Spain, workers fall into 2 categories: employees (trabajadores por cuenta ajena) and self-employed workers (trabajadores autónomos)—where contractors also fit.
Employees work under a contract, determining the direction of their work, mandatory rules, and specific guidelines between the worker and the employer—who’s responsible for paying the employees’ taxes, social security contributions, and other legal obligations.
Self-employed workers are individuals who run their businesses or freelance. They work under their direction and manage their own taxes and contributions. They typically enter into contracts with multiple clients and don’t receive the same benefits or protections as employees.
And that is where you’ll find contractors, too.
An independent contractor is a professional who offers services on a contractual basis rather than being a full-time employee. These professionals operate across many industries and roles, providing flexibility in the types of projects they take on. What defines an independent contractor is their autonomy—they set their own work hours, choose their location, and maintain control over how they deliver their services.
To ensure proper classification, you, as a business owner, must consider what you need. You must consider the nature of the work and the level of independence the worker will have. And that’s all because employee misclassification can lead to severe legal consequences.
And you don’t want that. So, let’s dive deeper into each classification.
What is an employee in Spain?
As in other countries, employees in Spain (trabajadores por cuenta ajena) work under an employer’s leadership in exchange for a salary every month. Courts recognize an employment relationship when a worker operates under a company’s management and organization.
Spanish labor laws—known as Estatuto de los Trabajadores— classify jobs by professional categories, regulating pay, hours, and leaves. Among other mandatory rights, these are the most common:
Social Security and Pensions: Spain’s social security system covers pensions, sick leave, disability, retirement, death benefits, and parental leave.
Vacation: Full-time employees have days off throughout the year.
Public holidays: Workers can enjoy 14 paid public holidays per year.
Employees can work under different contract types.
What are the different types of employment contracts in Spain?
Spain offers many types of employment contracts, each serving different purposes and employment scenarios:
Indefinite or permanent contracts: This is the most common type of contract and provides stability to employees. It has no fixed end date; companies use it for regular, long-term work relationships. These contracts can be full-time, part-time, or aimed at cyclical jobs.
Fixed-term or temporary contracts: Companies use these for temporary work, defining the start and end dates since the beginning. They’re ideal for seasonal work, project-based assignments, or covering an employee on leave.
Training or apprenticeship contracts: Designed for young workers or those without experience—generally between 16 and 21 years old, who lack the necessary qualifications to secure a work experience contract. This contract allows employees to receive training while working. It has specific regulations, and its duration can vary from 6 months to 2 years, which may extend up to 3 years through a collective labor agreement.
Work experience or internship contract: This contract allows students or recent graduates to work as part of their education or training, providing practical experience in their field of study. This contract is a getaway between their specific field of work and their first temporary job. Plus, the government offers financial incentives to employers who use these contracts. If the employee is under 30 or under 35 with a recognized disability of more than 33%, the company may receive a 50% reduction in professional contingency fees. This reduction can increase to 75% if the employee was previously engaged in unpaid work experience.
Remote work or distance-work employment contract: Remote work in Spain has grown due to work-life balance shifts and technology, prompting new regulations. According to law 10/2021, this contract applies when an employee works remotely at least 30% of their hours over 3 months. This requires mutual consent and a written agreement covering work conditions, expenses (paid by the employer), equipment, oversight, and security. This agreement must be voluntary, reversible, and submitted to the employee’s representative and the Public Employment Service within 10 days.
Each contract serves a different purpose and addresses specific employment scenarios. As a business owner, you must choose the proper contract based on the nature of the work and the duration you need.
Other types of workers in Spain: self-employed and contractors
Besides employees, you can work with other types of professionals in Spain, mainly freelancers and contractors. But beware of the laws…
What is a self-employed worker in Spain?
Self-employed workers in Spain are trabajadores autónomos (commonly known as freelancers). These professionals work on their own terms, never responding to a single entity or boss. They run their businesses, schedules, and workplaces—meaning they can work from wherever they want, when they want, as long as they deliver the agreed-upon work.
Unlike employees, freelancers handle their taxes and must guarantee that they invoice each client for each paid project. The same applies to contractors.
What is a contractor in Spain?
A contractor is also a self-employed individual who offers services to an organization without being an employee, usually for a specific project or timeframe. Also called freelancers or consultants, contractors handle their taxes and benefits. Spain recognizes different types of contractors, each with distinct regulations.
Understanding contractors in Spain
As this is a big thing in Spain, you should familiarize yourself with the different contractor types in the country. And there are 3 to highlight:
Independent contractors (freelancers): Self-employed individuals who work on a project agreement basis for an organization (normally an agency) but aren’t employees.
Self-employed entrepreneurs: Sole proprietors who operate their business as a separate legal entity.
Dependent contractors: Workers who function independently but rely on a single client for over 75% of their income. A dependent contractor:
Works independently but earns primarily from 1 client
Has no employees or subcontractors
Uses their own tools and assumes financial risk
Operates outside the company’s structure and policies
Gets paid only if contractual goals are met
In short, while employees work under a contract for an employer, a contractor doesn’t. While employees can benefit from fixed holidays, social security, and meal allowances, contractors can’t. And while employers must work within a schedule in a certain workplace, contractors mustn’t.
But beware of the Spanish law…
False freelancer law in Spain
In Spain, misclassifying workers can put you in real danger—something known as False Freelancer Law or False Freelancer Policy. You can think that working with a contractor saves you money, but if you depend a lot on their work, chances are you’ll want their collaboration in the long run.
So, if that happens and a freelancer ends up working as a full-time employee for you, it’s time to switch scenarios.
For instance, if a professional works according to a specific schedule and must go to the office some days per week, you should probably consider an employment contract to hire that person. In 2022, the Spanish government fined Glovo €78.9 million for falsely registering delivery staff as self-employed.
Why? Well, not only because you enjoy their work, but also because misclassifying workers in Spain leads to harsh penalties. In fact, businesses found guilty of such face these repercussions:
Jail up to 6 years
Back taxes on wages
Fines for labor fraud between €3,750 and €12,000
Paying out for overtime, vacation days, public holidays, or other benefits that the contractor would have earned as an employee
Spain offers different employment contracts depending on your business needs. So, choosing the proper classification and contract type ensures legal compliance and fosters a productive work environment.
On the contrary, misclassifying workers leads to significant legal and financial consequences, including fines and back payments. By staying informed and adhering to Spain’s labor regulations, you can expand and operate with ease while ensuring fair treatment and job security for their workforce.
