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WORKING IN SPAIN

The steps and requirements to hire a foreign worker in Spain

If you need to hire foreign staff in Spain, there are several factors and steps to the recruiting process that you should be aware of in order for it be done legally, from the work permit to the contract.

Published: 1 December 2023 13:06 CET
requirement hire foreigner spain
Hiring an EU national in Spain is far easier than doing so with third country national. Photo: Pau BARRENA/AFP

Employment is regulated in Spain by the convenio colectivo, a set of rules which regulate working hours, number of holiday days, salary, as well as sick pay, maternity and paternity leave, and how to terminate a contract.

Many of these rules are the same for Spaniards and non-Spaniards alike, but there are a few extra steps and requirements you need to know about in order to hire a foreign worker in Spain.

You can read more about the requirements for hiring a Spaniard in Spain in the article directly below, which includes a lot of the same information with regards to hours, holiday days, pay, and so on, as it does for foreigners.

EXPLAINED: What you need to know before hiring a worker in Spain

Different types of foreigners

Employment contracts for foreign workers in Spain are regulated by certain rules, informed mostly by immigration law, and were most recently amended through Royal Decree 629/2022 in July 2022.

First things first, when hiring a foreign worker in Spain you must consider that there are different types of foreigners in the eyes of the law.

If your potential employee is a foreigner who is an EU citizen, a citizen from the European Economic Area or Switzerland, then they can legally access the Spanish labour market with the same rights as Spanish nationals — simple.

So, what does this mean in practice? Basically, if you want to hire a non-EU worker, you’ll need to get a work permit for your future employee.

There are essentially three main situations you could find yourself when it comes to hiring a non-EU worker in Spain. You could want to hire:

  • Non-EU/EEA/Swiss workers not in Spain.
  • Non-EU/EEA/Swiss nationals who are in Spain with another permit – work, residency or otherwise.
  • Non-EU/EEA/Swiss workers who are already in Spain, but in an irregular immigration situation. 

READ ALSO: What are the types of work contracts in Spain and which one is the best?

Types of work permits for foreigners

Each of these situations is subject to a different legal procedure in order for your employee to be able to work and live legally in Spain.

In all cases, in order to obtain work and residence authorisation, it is necessary to have an employment contract that complies with certain requirements regarding duration and salary, among other things (more on that below).

In some cases it is the employer who must initiate the work permit application, while in others it is the employee who must take the initiative.

These are essentially two types of permit:

Autorización de residencia y trabajo por cuenta ajena (residence and work authorisation as an employee) This is by far the most common route, and is used to manage hiring at origin, allowing the employee to reside for a specific period of time in Spain for the purpose of their employment. This authorisation is initiated by the employer.

Autorizaciones por circunstancias excepcionales de arraigo (authorisations due to exceptional circumstances) This is a far less common way of hiring a foreign worker, and are temporary residency and work rights granted to people at the request of the interested party, that is, the employee, in exceptional circumstances. You can read more about this HI 37 permit here but generally speaking these are for carers, parents, and the spouses of Spanish nationals.

What are the requirements for hiring a foreign worker?

As for what an employer needs to do in order to hire a foreigner, there are certain general requirements that must be met, such as that the company is up to date with its obligations to the taxman and social security payments.

Labour market situation – in the case of the standard work permit, Spain’s domestic employment situation must be such that the hiring of non-residents in Spain is deemed necessary. That is to say, the employer must accompany the non-EU work permit application with a certificate from Spain’s Public Employment Service showing that there are no suitable and available workers in the domestic labour market, and that the employer can therefore only recruit from abroad.

This used to be fairly hard as  apart from the no EU candidate requirement, the other alternative was that the potential non-EU recruits’ jobs had to be Spain’s shortage occupation list, made up almost entirely by jobs in the maritime and shipping industry.

But the Spanish government has realised that it has shortages in far more industries, from waiters to construction workers, and has no reportedly made it easier to recruit all types of non-EU workers.

READ ALSO: How it’s now easier for foreigners to work in Spain

Equally, high-ranking and highly qualified employees can more easily be employed thanks to the EU Blue Card. These are workers who perform only senior management activities on behalf of the company that hires them, and nobody else. The same applies to highly qualified workers who have essential knowledge or specialisms. 

The situation for foreigners in regulated professions (dentists, doctors, lawyers, engineers etc) is far more complicated, as they need to have their non-EU qualifications recognised before being able to legally work in Spain, a bureaucratic fiasco that has more than 40,000 high-skilled foreign workers waiting for up to seven years.

READ MORE: Homologación – How Spain is ruining the careers of thousands of qualified foreigners

Salary – for standard work permits, the salary must be at least equal to the minimum wage (SMI). Note that Spain’s SMI is due to be increase in January 2024.

Contract – you must offer a fixed-term contract of more than 90 days and less than five years. The contract must clearly state the agreed remuneration, in number and payments per year. If the contract is part-time, the remuneration must be equal to or higher than the SMI for full time and in annual calculation.

Age – The minimum age of the worker, in case of authorisation for residence and work as an employee, is 16 years old.

The application

If all these criteria are satisfied and made clear in the prospective contract, you must file EX-03 form and the necessary documentation (including the contract signed with the employee) to the competent administration, which is usually the immigration office in the province where the services or work is to be carried out.

You can find the EX-03 form here.

The application can be submitted electronically or in person, and the deadline for a decision is three months. The duration of the permit is one year from the date it is granted, extendable for four years.

READ ALSO: Spain’s next minimum wage increase: What we know so far

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PENSIONS

Spain needs 25 million foreign workers to keep its pensions afloat

As the retirement of baby boomers looms, Spain's ageing population and declining birth rate mean the country will need millions of foreign workers to maintain its public pension pot and reinforce the labour market, the Bank of Spain has warned.

Published: 2 May 2024 09:46 CEST
Spain needs 25 million foreign workers to keep its pensions afloat

A recent study by the Bank of Spain estimates that the country will need up to 25 million more immigrant workers by 2053 in order to combat demographic ageing and maintain the ratio of workers to pensioners in order to support the pension system.

Without an influx of more foreign workers or sudden increase in the birth rate in Spain, something that seems very unlikely, experts fear that the growing disparity between working age people and pensioners could put the public pensions system in danger in the medium to long-term.

Like in many countries in the western world, the Spanish population is ageing, with the percentage of the population over 65 years of age predicted to peak in 2050, when almost one in three will be 65 years old or older.

READ ALSO: Spain’s over 65s exceed 20 percent of the population for the first time

By 2035 around one in four (26.0 percent) of Spaniards are expected to be 65 or older. That figure is currently around one fifth of the population.

Furthermore, this is compounded by falling birth rates. Spain’s birth rate hit a record low in 2023, falling to its lowest level since records began, according to INE data. Spain’s fertility rate is the second lowest in the European Union, with Eurostat figures showing there were just 1.19 births per woman in Spain in 2021, compared with 1.13 in Malta and 1.25 in Italy.

If nothing changes, the current ratio of 3.8 people of working age for every pensioner is predicted to plummet to just 2.1 by 2053, according to INE projections.

Maintaining this ratio seems unlikely moving forward, according to the report’s conclusions, something that would put pressure on pensions without significantly increasing social security contributions among working age people.

READ ALSO: Older and more diverse: What Spain’s population will be like in 50 years

The Bank of Spain report noted that “immigrants have high labour participation rates, generally above those of natives – in 2022, 70 percent and 56.5 percent, respectively.”

In three decades’ time, the INE expects Spain to have 14.8 million pensioners, 18 million Spanish nationals of working age and 12 million foreigners. To maintain the ratio, the Bank of Spain forecasts that the working immigrant population would have to rise by more than 25 million to a total of 37 million overall.

Of course, the arrival of 25 million working-age foreigners seems unlikely, if not impossible. To achieve this, around 1 million net migrants would have to enter Spain each year (discounting departures), a figure unprecedented in recent history. To put the figure in context, between 2002 and 2022 net arrivals in Spain reached five million, roughly five times less than what would be necessary to maintain the balance between workers and pensioners.

READ ALSO: ‘Homologación’ – How Spain is ruining the careers of thousands of qualified foreigners

Putting the economics aside, even if such an increase were statistically plausible, such a surge in net migration would be contentious both politically and socially. And it’s not even certain that increased migrant flows would be able to fill the gap in working age people and bolster public pensions: “The capacity of migratory flows to significantly mitigate the process of population ageing is limited,” the Bank of Spain warned in its report. 

What these projections suggest is that Spain’s public pension system will, in coming decades, likely have to be sustained by the contribution of fewer workers overall. This likely means higher social security payments. “Migratory flows have been very dynamic in recent years, but it does not seem likely that they can avoid the process of population ageing… nor completely resolve the imbalances that could arise in the Spanish labour market in the future,” the report stated.

The problem of ageing will also be transferred to the labour market and the types of jobs filled in the future. Increased migratory flows will soften the effect, but the labour characteristics of migrants coming to Spain may not match the job market in the coming decades. The jobs of the future, increasingly digital, will likely require qualifications that many of the migrants expected to arrive in the coming years do not have.

Consequently, the Bank of Spain suggests that “without significant changes in the nature of migratory flows, it does not seem likely that… [they] can completely resolve the mismatches between labour supply and demand that could occur in the coming years in the Spanish labour market.”

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