Labour reforms under Royal Decree-Law 8/2023

23 January 2024 2 min read

By Fernando Cañestro Melgar

At a glance

  • The national minimum wage for 2023 will continue to apply until the new rate for 2024 is approved;
  • Limits are placed on the ability of employers in receipt of state aid to make redundancy dismissals;
  • Rules are relaxed on incentives for businesses hiring employees to cover for employees absent for pregnancy/maternity related reasons;
  • Various changes to social security contribution rules are made.

On 27 December 2023, the Spanish Official Gazette published Royal Decree-Law 8/2023. The main labour law and social security measures introduced by this Decree are as follows:

  • National Minimum Wage: Until the Royal Decree fixing the National Minimum Wage for 2024 is approved, the legislation extends the National Minimum Wage for 2023 by continuing the application of the amount which applied during 2023, which was set at EUR1,080 per month payable in 14 payments (EUR15,120 annually).

    However, the Labour and Social Economy Minister and the national trade unions with the largest share of representation (CCOO and UGT) have reached an agreement to increase the National Minimum Wage by 5% for 2024, which would amount to EUR1,134 per month payable in 14 payments (EUR15,876 annually). However, this is pending publication in the Official Gazette.
  • Restrictions for companies in receipt of aid: Companies which are benefiting from public aid and which fall within the scope of the new law may not use the increase in energy costs as objective grounds for redundancies. This prohibition will last until 30 June 2024.

    A similar prohibition is also imposed on companies which are operating under temporary employment measures, such as reduced working hours or suspended contracts,  for reasons related to the invasion of Ukraine and which are subject to public aid. These companies will also be unable to use increased energy costs as objective grounds for redundancies.
  • Changes to incentives for hiring employees to cover for employees on childbirth/childcare leave or who are caring for a breastfeeding child or who are at risk for reasons related to pregnancy or breastfeeding:

    It is now possible (in certain cases) to receiving hiring incentives in respect of an individual who is rehired - while unemployed – to provide temporary replacement cover, even if they have been employed by the company in the previous 12 months (on a permanent employment contract) or 6 months (on a temporary employment contract).
  • Mechanism for Intergenerational Equity: For 2024, the Mechanism for Intergenerational Equity will increase from the current 0.6% of the Social Security contribution base which applied in 2023 to 0.7% for 2024. Of this, 0.58% will be borne by the employer, and the remaining 0.12% will be borne by the employee.
  • Social security contributions for internships: From January 2024 and subject to specific rules and limitations, employer entities are obliged to contribute to the Social Security system for students who take part in job training programs or external academic internships.

    The new contribution rules may be subject to further change when the National General Budget for 2024 is approved.