To do business in Spain, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in Spain, and it is important to back this up with the right research on the market and potential business associates.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Spanish work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Spain to start your expansion well-informed.
The work culture in Spain
When planning business in a new territory, you should be well prepped on the culture and etiquette and not only in the workplace. Spain has a warm, friendly, and laid-back attitude in general and the Spanish can be traditionalists. However, with an up-and-coming young go-getting work force who may have been trained abroad bringing with them a new vision of Spain, culture in the workplace is changing.
Getting to know each other first can be key, including any regional differences. For instance, business may not be the first thing on the agenda but establishing the right atmosphere through points of interest such as sport or music can help to build respect and trust. So, take your time and be prepared for lively discussions, the necessity for consultation, and to negotiate over lunch or dinner.
Adjusting to Spanish work culture can be a big step for incoming employees as they deal with the business practices surrounding management, hierarchy, negotiations, and customs. It is time to get down to business, so for instance:
- Changing attitudes: A younger management class, many having worked or been educated abroad, are changing the traditional hierarchical attitudes to business structure. But a more traditional mindset prevails in family businesses and government agencies.
- Negotiations: These are generally undertaken between peers. If issues arise it is best to get your boss to talk to their boss.
- Women in the workplace: As of October 2020, 37% of managerial positions in Spain were held by women, slightly above the European Union average. Foreign women are readily accepted as managers, but northern Europeans or Americans may have to adjust to hearing male co-workers commenting on their appearance.
- Business meetings: These tend to confirm or communicate decisions already made at a higher level. Personal chat is OK and exchanging views can become noisy while staying friendly.
- Business relationships: Building trust and relationships socially is preferred before starting formal negotiations, especially through lunches and dinners. Final decisions are usually made by senior managers, or solely by chief executives.
- Punctuality: The famous siesta is no longer a feature of Spanish business, but the concept of punctuality is flexible. At company level the working day may not get into gear until 10am and carrying on till 8pm is not uncommon. Lunches can last two hours, and employees tend to start drifting away by 3pm on Fridays. But foreign employees should start by being punctual before the office routine becomes clear.
- Office routine: Meetings should be planned well in advance and avoid scheduling between 2-5pm, in case of long lunches.
- Introductions and greetings: Business greetings are extensive. Shake hands with everyone, light kisses on the cheek are only exchanged by long-term acquaintances. Address Spaniards with the relevant prefix, senor, senora, or senorita until the host initiates using first names.
- Dress code: Spaniards tend to take great care over appearance for business meetings and the dress code is formal, professional, and classic featuring dark suits for both men and women.
Spain Minimum Wage
In 2021, the national minimum wage in Spain remained fixed at € 1,108.30 per month (US$1,308), €13,300 per year (US$15,709), considering 12 payments per year. This is set by the Ministry of Employment and Social Security.
Probation Periods in Spain
Probation periods are not compulsory and vary between two months, typically, to a maximum of six months depending on category of worker and must be confirmed in the employment contract e.g., six months for college graduates and technicians; two months for all other workers.
Employment may be terminated by either party for any reason, without notice and without any compensation, unless otherwise agreed.
Working Hours in Spain
Working hours are regulated by Spanish law, which also covers rest time, annual leave, overtime, vacations, and public holidays. Full-time workers aged over 18 cannot work more than 40 hours a week, averaged over a year, or more than nine hours a day unless a collective bargaining agreement applies.
Overtime cannot exceed 80 hours annually. There must be 12 hours’ rest between the end of one working day and the start of the next. Since May 2019 employers must keep records of employees’ daily hours worked for four years.
Overtime in Spain
Overtime is not obligatory unless stipulated in a collective bargaining agreement or contract. Any work over the maximum allowed normal working hours is considered overtime and cannot exceed 80 hours annually.
Compensation for extra hours can be paid for at a premium or time off given in lieu. Since May 2019 employers must keep records of employees’ daily hours worked for four years.
Notice Periods in Spain
Notice periods are generally written into a collective bargaining agreement or contract. These can be changed if agreed upon by both parties. If there is no agreement according to the Labor Law, whoever is seeking the dissolution of employment must give a minimum of 15 days’ notice prior to termination.
During a trial or probationary period, no statutory notice is needed unless agreed upon prior to employment.
Redundancy and Termination/Severance in Spain
Grounds for individual termination include end of contract for a specific job, resignation, and retirement through permanent illness. Objective dismissals can be based on workers’ incompetence, inability to adapt to technical change, poor attendance and redundancies based on economic, technical, or organizational grounds.
In the event of fair dismissal, legislation requires employees are paid a minimum legal compensation of 20 days’ pay for each year of service, up to a maximum of 12 months’ pay.
In unfair dismissals, an employee on an open-ended contract is paid a minimum legal compensation of 45 days’ pay for each year of service, up to a maximum of 43 months’ pay.
In enterprises of fewer than 25 employees, the Public Fund of Wage Warranty (Fondo de Garantía Salarial) pays 40% of the legal indemnification of employees in collective redundancies.
Pension Plans in Spain
Spain operates a three-pillar pension system comprising a generous state pension and voluntary occupational and private pension arrangements. Spain has a relatively small pension market, dominated by third pillar insurance products.
Public Holidays in Spain
- New Year’s Day - January 1
- Epiphany - January 6
- Good Friday - March / April
- Labor Day - May 1
- Assumption of the Virgin - August 15
- Hispanic Day - October 12
- All Saints Day - November 1
- Constitution Day - December 6
- Immaculate Conception Day - December 8
- Christmas Day - December 25
National/Public Holidays are celebrated on the day they fall and most businesses and schools close. There are also regional holidays whose dates can change every year.
Sick Leave in Spain
There is no payment for the first three days of illness. The Labor Law stipulates employees temporarily unable to work due to illness or injury receives 60% of salary from the 4th day to day 20 and this is paid by the employer.
From day 21 and onwards, the worker is entitled to 75% of salary from the employer who is then refunded by the Social Security Institute (Instituto Nacional de Seguridad Social, INSS).
Employees are allowed up to 12 months' sick leave, with a medical certificate, which can be extended to 18 months; after this, the situation is reviewed.
Vacation/Holiday in Spain
Employees receive paid leave of 30 calendar days (22 working days) annually. Paid time off also applies to marriage, death of a relative and moving house in addition to public holidays.
Employees are entitled to a minimum of 30 calendar days (22 working days) per year paid leave with one holiday period comprising a minimum of two weeks.
Employers cannot replace holidays with paid compensation. Additionally, there are public, regional, and local paid holidays.
The holiday calendar is set by each company and agreed upon by workers and employers. Time off can also be given for marriage, death of a relative and moving house.
Maternity/Paternity Leave in Spain
Maternity Leave: is for a minimum statutory 16 weeks (18 weeks for twins and 20 weeks for triplets) taken consecutively including weekends and holidays with a minimum six weeks taken after birth.
Maternity Benefit: The mother is entitled to full pay from the Spanish Social Security Institute (Instituto Nacional de Seguridad Social, INSS). Additionally, all pregnant women are entitled to healthcare before, during and following the birth at hospitals belonging to the National Health Service (Sistema Nacional de Salud).
Paternity Leave: This increases to 16 weeks from 2021, the same as for the mother, but the allowance is not transferrable between partners. As with the mother, six weeks is mandatory after the birth. Both parents receive 100% of their salary.
Bonuses in Spain
Discretionary bonuses in Spain are taxed as general income and must also be included in any termination or severance agreements as part of the salary.
‘13th and 14th month’ payments are mandatory in Spain and are usually spread over 12 payments, although this varies depending on the company's collective agreement.
Car Allowances in Spain
Employees’ use of company cars is not taxable if there is no private use; neither are reimbursed costs for fuel, tolls, or parking on production of receipts.
Employees using their own cars must be reimbursed by their employer, with €0.19 exempt from tax or social security pay.
Do not suffer culture shock, call us!
The complexities of Spanish tax, payroll and employment laws are part of a business culture that will create barriers to your international expansion. Bradford Jacobs removes the mysteries of all these issues – freeing your staff to concentrate on growing your business. Contact us today for more information.