Spain's plan for a shorter workweek to enhance work/life balance gains momentum but faces strong opposition in Parliament and could increase future labor costs.
Employer Action Code: Act
Spain's government is trying to push through legislation that would reduce the normal workweek from 40 to 37.5 hours with no reduction in pay. The measure was first proposed in tripartite consultations at the end of 2024 but was rejected by business leadership. In response, and with union support, the government is pushing for Parliament to pass legislation that would implement the change this year. Also, the government has increased the statutory minimum wage (Salario Mínimo Interprofesional – SMI) by 4.4% for 2025. Separate regulations, which have already taken effect, modify the partial retirement system and increase social security contributions.
Key details
Reduction of workweek
- The normal workweek would drop from 40 to 37.5 hours of "average effective work on an annual basis," with no loss in pay. Employers would be required to maintain a daily digital record of working hours, accessible to the Labor and Social Security Inspectorate and employee representatives.
- Collective bargaining agreements would have to be amended to guarantee the right of employees to "disconnect" from work (i.e., not engage in work-related communications — such as emails, calls and messages — outside of agreed working hours).
Minimum wage (SMI)
- The SMI increased from 1,134 euros to 1,184 euros per month for employees age 18 or older, retroactive to January 1, 2025. The SMI is normally adjusted annually in January by Royal Decree and serves as a reference point for collective pay negotiations.
Partial retirement
- Effective April 1, 2025, employees may commence partial retirement up to three years (currently up to two years) before their social security normal retirement age (NRA), provided the individual has at least 33 years of insured employment and a replacement worker is hired. In 2025, NRA is age 66 and eight months (or age 65 for persons with at least 38 years and three months of insured employment).
- If partial retirement starts within two years of NRA, work hours and salary may be reduced by 25% to 75% (currently 25% to 50%), with an inverse reduction (75% to 25%) to the social security pension payable (e.g., 75% pension reduction if work hours are reduced by 25%).
Social security contributions
- Effective January 1, 2025, the total contribution rate to the social security reserve fund to finance annual increases of pensions in payment increased from 0.7% to 0.8% of covered pay (0.67% for the employer and 0.13% for the employee).
Employer implications
The government is arguing for the reduction in the normal workweek to enhance work/life balance; however, the measure faces strong opposition in Parliament where the government is in the minority. Few of the companies surveyed by WTW in Spain observe a 37.5-hour workweek (7% in offices, 11% in plants and 10% of retail shops), so imposing a shorter workweek all at once could significantly increase labor costs.
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