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LABOUR RIGHTS

EU rules Spain’s treatment of domestic workers is discriminatory

European Union judges on Thursday ruled that there is no valid reason for Spain not to offer domestic workers in the country the right to unemployment benefits as is the case for other contract employees. 

Published: 24 February 2022 12:13 CET
spain domestic workers rights
Many domestic workers in Spain are still not given work contracts by their employers. Photo: JOSEPH EID/AFP

The Court of Justice of the European Union on Thursday February 24th ruled that the Spanish system is discriminatory against its domestic workers, contrary to EU laws and indirectly sexist in that it particularly affects women.

“This exclusion entails a greater lack of social protection for domestic employees, which translates into a situation of social abandonment,” the high court statement published on Thursday reads.

Although the ruling is non-binding, it’s a win for domestic workers in Spain who for decades have been forgotten by authorities and usually forced to work in the underground economy.

The decision by the EU courts follows an appeal in 2019 by a domestic worker in Spain who wished to contribute taxes towards future unemployment benefits, only for the country’s Social Security agency to reject her request under the premise that Spanish law doesn’t allow it.

In 2011, Spain approved the current special regime for domestic workers, which recognised some labour rights such as access to sick leave but continued to deny other basic worker benefits such as unemployment payments.

Despite this, a third of the 536,100 domestics (mostly foreign women) who work in Spain are still not signed up to Spain’s social security system, according to the country’s 2021 Labour Force Survey. Two out of every three have earnings around the minimum wage bracket.

READ ALSO: What changed for families who have a domestic worker or cleaner in Spain in 2021

In February 2021, Spain’s Labour Ministry sent out around 45,000 letters to households with empleadas del hogar (domestic workers) warning them that they have to properly register their employees in Spain’s social security system and make the right contributions (cotizaciones), as well as ensuring they are paying them at least the minimum wage.

It’s not the first time the Court of Justice of the European Union calls out Spain’s labour laws as discriminatory as in 2012 they ruled that access to Spain’s more generous contributory pension system indirectly discriminated against women as there are a far higher number of women in part-time jobs in the country.

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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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