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Relocation of workers under a cross-border working arrangement within the EU and the EEA (“impatriates”)

11.1 Temporary cross-border working
of local hiring

As a general rule, foreign employees temporarily posted to Spain under cross-border working arrangements can maintain the employment contract signed in their country of origin.

Both Regulation 593/2008 of the European Parliament and of the Council of June 17, 2008, on the law applicable to contractual obligations (Rome I) and Article 10.6 of the Civil Code, allows the parties to choose the applicable law, save for any mandatory matters under Spanish law.

The Law 45/1999, of November 29, 1999 establishes that in certain temporary secondments a number of minimum working conditions must be observed.

This Law applies to workers relocated by employers from the European Union, and from the European Economic Area (the EU plus Norway, Iceland and Liechtenstein) in a cross-border working agreement for a limited time period in the following cases:

  • within the same company or within a group of companies.
  • under international services contracts.
  • When the workers of a temporary employment agency are posted to a client company in Spain.

The only exceptions to the above are in the case of employee relocations during training periods and postings lasting less than eight days, unless they involve workers employed by temporary employment agencies.

The minimum working conditions to be guaranteed by employers in the above countries in accordance with Spanish labor legislation and, regardless of the law applicable to the employment contract, are: (I) working time, (II) salary (which must be at least the amount provided for the same position under a statutory or regulatory provision or collective labor agreement), (III) equality of treatment, (IV) the rules on underage work, (V) prevention of occupational risks, (VI) nondiscrimination against temporary and part-time workers, (VII) respect for privacy, dignity, and the freedom to join a union, and (VIII) rights of strike and assembly. However, if employees relocated to Spain enjoy more favorable conditions in their country of origin, those conditions will apply.

Employers in such cases must also notify postings to the Spanish Labor Authorities before the worker starts work and regardless of the duration of the posting (except for those lasting less than eight days), designating a representative in Spain. The notice must be served by the foreign company that posts the worker on the authorities of the Autonomous Community in which the posted worker is to work (a central electronic register of notices is still to be created). The basic contents of this notice are: identification of the company that posts the worker, as well as the company that hosts him; identification of the worker; commencement date and projected duration; and identification of the specific case of posting.

There is also an obligation to make the following documentation available (translated into Spanish or the co-official language of the place where the workplace is located) at the workplace to which the worker has been posted: employment contracts or essential elements of the contract; pay statements and evidence that workers have been paid; any records of hours kept, indicating the beginning, end and duration of the working day; work permit of third-country nationals in compliance with the legislation of the State of establishment.

Lastly, employers are under the obligation to notify the Spanish Labor Authorities of any damage to the health of posted workers occasioned upon or as a result of work performed in Spain.

The legislation on labor infringements and penalties classifies a series of infringements in this connection. Formal defects in notifying the relocation of workers to Spain or failing to serve notice of minor occupational accidents of those workers constitute a minor infringement, while notification of the relocation after it has taken place, not having the aforesaid documents available during the relocation or failing to serve notice on the Labor Authorities of serious, very serious or mortal accidents of the posted workers are classed as a serious infringement. Failing to notify the relocation or any misrepresentation or concealment of the data contained in the notification are considered very serious infringements.

Failing to meet the minimum working conditions mentioned above, which are classified according to the penalties applicable to Spanish employers, are considered administrative infringements.

We will be under situations of local hiring instead of temporary transfers when companies without establishment in Spain hire workers in the country.

If it is not a temporary secondment, but rather, the provision of services in Spain has a vocation of permanence, the employer will sign an employment contract with the employee in accordance with Spanish regulation (“local hiring”). Foreign companies without an establishment in Spain hire locally without the need to establish a Spanish company. The foreign company, however, will have to follow the steps set out in section 10 above, practical aspects to be considered when setting up a company in Spain, but referred to the foreign company.

11.2 Applicable Social Security

Council Regulations (EC) 883/2004 and 987/2009 on the coordination of social security schemes apply within the European Union, the Economic European Area, and Switzerland and ensure that the workers to whom they are applicable are not adversely affected from a social security standpoint by moving from one Member State to another.

There are a number of bilateral social security agreements between Spain and other countries, which regulate the effects on Spanish public benefits of periods of contribution to the social security systems of other States. These agreements also determine the State in which social security contributions are to be paid in cases of relocation and temporary or permanent assignments abroad.

The following bilateral agreements are currently in force (Table 7).

Table 7

BILATERAL AGREEMENTS WITH SPAIN PERSONS TO WHOM IT APPLIES
Andorra Any nationality
Argentina Any nationality
Australia Any nationality
Brazil Any nationality
Canada Any nationality
Cape Verde Spaniards and Cape Verdeans
Chile Spaniards and Chileans
Colombia Spaniards and Colombians
Dominican Republic Spaniards and Dominicans
Ecuador Spaniards and Ecuadorians
Japan Any nationality
Morocco Spaniards and Moroccans
Mexico Spaniards and Mexicans
Paraguay Any nationality
Peru Any nationality
Philippines Spaniards and Philippines
Republic of Korea Any nationality
Russia Spaniards and Russians
Tunisia Spaniards and Tunisians
Ukraine Spaniards and Ukrainians
Uruguay Cualquier nacionalidad
USA Any nationality
Venezuela Spaniards and Venezuelans

Finally, the Multilateral Latin American Social Security Agreement is also applicable in Spain, an instrument coordinating the different social security legislation on pensions of the different Latin American States that have ratified it and signed the Implementation Agreement (currently Bolivia, Brazil, Chile, Ecuador, El Salvador Paraguay, Portugal and Uruguay, as well as Spain).

Workers posted to Spain under the relevant social security agreements or regulations who continue to be subject to the legislation of their country of origin and evidence this by way of the relevant certificate, generally will not be registered with the Spanish social security system for the period envisaged in same, according to the terms of the agreement.

On the contrary, when a worker is employed in Spain to carry out services in this country on a permanent basis, the general rule of registration into the Spanish Social Security System shall apply irrespective of the worker’s nationality.