Key changes to Spanish employment legislation in 2013

The following changes have been introduced in Spain:

• the existing public pensions system has been modified
• penalties for non-complance with laws on control and surveillance of unemployment benefits and fraudulent employment have been increased
• social security contribution rates and minimum wages have been updated

See a brief report below or a more detailed summary is available in Spanish or in English.

Modification of the Spanish public pensions system (Act 27/2011 dated 21 August):

This Act made a number of amendments to the existing public pensions system. Most of these amendments came into force on 1 January 2013. Two key areas of reform have included:

• increasing the legal retirement age from 65 to 67. This will be implemented gradually from 2013 to 2027. Specifically the retirement age will increase by 1 month annually over the period of 2013-2018 and 2 months annually over the period of 2019-2027; and
• lengthening the contribution period required to access full public pension benefits, from 35 to 38.5 years of contribution. This will be implemented gradually over the period of 2013 to 2027. The period previously used to calculate the amount of the public pension will also be increased from 15 to 25 years. This will also be implemented gradually over the period of 2013 to 2022.

Control and surveillance of unemployment benefits and fraudulent employment (Act 7/2012 dated 27 December):

This Act amends Act 10/1995 (dated 23 November) and approves the Criminal Code on Transparency and Prevention of Tax and Social Security Fraud. The Act increases the maximum sentence for a breach of social security regulations (from 5 to 6 years imprisonment) and extends the statutory limitation period for very serious breaches, from 5 to 10 years.

Under Spanish labour laws, the principal and the contractor are jointly and severally liable during the term of the contract and for one year after its conclusion. Now, the liability period has been extended from one to three years after termination of the contract if the contractor breaches its obligations owed to the social security authorities.

Finally, breaches by employers due to a lack of payment of social security contributions will be sanctioned with fines of between 50% to 150% of the amount due (previously they would be subject to a fixed fine). Fines for other serious breaches of social security duties (e.g. record keeping requirements and providing insufficient information to the authorities/employees) will continue to be sanctioned with fixed fines.  However, the minimum amount of the fixed fine has been increased from €626 to €3,000, and the maximum amount of fixed fine remains limited to €187,515.

Act 17/2012 on the General State Budget for 2013

Bases and contribution rates applicable to the general social security regime for 2013 are as follows:

• Maximum contribution base: €3,425.70 per month
• Minimum contribution base: €752.70 per month
• The contribution rates applicable to each employee's social security bases have not been changed
• The minimum wage for 2013 is set at €645.30 per month (€9,034.20 annually).