HEALTHPLAN MAGAZINE

Effective September 1st, significant modifications regarding incentives provided to employers for recruiting specific categories of workers will come into effect. These adjustments will influence any employment contracts in Spain that are signed after the designated date.

Approved on January 10 of this year by the Council of Ministers by Royal Decree-Law 1/2023, this transition introduces a fresh incentive structure for recruitment, with a notable emphasis on permanent employment agreements and the recruitment of susceptible demographics.

Particularly, these vulnerable groups encompass women, the long-term unemployed, individuals over 45 years old, and youths under 30 years old.

Commencing from September onward, a newly enacted law (specifically, Royal Decree-Law 1/2023) will establish a framework of incentives for employment contracts, concurrently enhancing social protections for workers within Spain.

Irrespective of the timing, nature, or potential change in government, these novel measures will be implemented with the primary goal of supporting indefinite-term contracts and marginalised demographics.

Central to the legislative changes are the incentives offered to certain companies when hiring specific personnel.

Advantages for Permanent Employment

A central objective of this fresh legislation is to cultivate stable employment opportunities, while concurrently encouraging the recruitment of demographics categorised as vulnerable and those grappling with long-term unemployment.

In furtherance of this goal, companies opting to employ individuals from these groups will be entitled to predetermined tax deductions, as follows:

• Men under 45 with prolonged unemployment: 110 euros per month for a three-year period.
• Long-term unemployed women: 128 euros per month for a three-year period.
• Individuals aged 45 or older facing long-term unemployment: 128 euros per month for three years.
• Hiring individuals with certificates of social exclusion: 128 euros per month for four years.
• Recruiting victims of terrorism: 128 euros per month for four years.
• Employing women who are survivors of gender-based violence: 128 euros per month for four years.
• Individuals with intellectual disabilities: 128 euros per month for four years.
• Individuals with permanent or absolute disabilities: 138 euros per month for two years.
• Young individuals under 30 with limited qualifications: 275 euros per month for three years.

Termination of Benefits

Commencing September 1st, several existing benefits will cease to be applicable. Among these, benefits related to the recruitment of family members will end, excluding cases involving individuals with disabilities.

Furthermore, hiring bonuses will no longer apply to workers who have maintained a permanent contract with the same company for the preceding 12 months, or with a temporary or training contract for the prior six months.

Additionally, the complete rebate for contracts involving unemployed individuals who replace workers due to maternity, fostering, or adoption will conclude. This benefit will be modified to a flat rate of 336 euros in two scenarios:

Fixed-term contracts offered to unemployed individuals under 30 years old, serving as replacements for workers receiving economic benefits during pregnancy or breastfeeding risks.
Fixed-term contracts provided to unemployed individuals under 30 years old, replacing workers receiving economic benefits for childbirth and childcare.

Reduced benefits will also extend to companies with part-time contracts. In such instances, the magnitude of bonuses will be proportionally reduced. Part-time contracts comprising less than 50 percent of a full-time working day will not receive incentives, except in cases of work-life balance leave.

Sources

https://www.thelocal.es/20230828/the-changes-to-job-contracts-in-spain-in-september-2023
https://as.com/actualidad/economia/los-cambios-en-los-contratos-de-trabajo-que-entran-en-vigor-a-partir-del-1-de-septiembre-n/
https://www.elperiodico.com/es/economia/20230821/cambios-contratos-trabajo-septiembre-dv-90963726