Interesting in posting workers to Spain? As businesses expand globally, understanding the legal nuances of international employment is key to success.
In this blog, we will explain the obligations that must be fulfilled in the context of the posting of workers. From the Global Mobility department, we offer all the necessary services to ensure that the international mobility of workers takes place safely and follows the applicable legal regulations.
In this sense, before starting, it is important to bear in mind that in the international posting of a worker to Spain, it is necessary to take into account the Pentagon composed of 5 obligations: Immigration, Social Security, National Labour, International Labour and Tax. As we will see, in some cases not all of them will come into play, but in most cases, it will be necessary to cover all 5 steps.
Table of contents
Key Points About Posting Workers Abroad: The Pentagon composed of 5 obligations
- Immigration: posted workers must have a specific work permit. The type of permit will depend on the time they will be in Spain and their nationality.
- Social Security: typically, posted workers remain within their home country’s Social Security system. However, specific documentation and agreements are necessary to confirm these arrangements, such as the A1 certificate.
- National Labour: posted workers must have their employment terms and conditions aligned with those mandated by Spanish labour laws, including minimum wage, working hours, and health and safety standards.
- International Labour: companies posting workers to Spain must register the assignment with Spanish authorities, providing details about the duration of the stay and the nature of the work.
- Tax: tax obligations of posted employees should be taken into account.
Understanding these aspects is crucial for businesses to ensure compliance and protect the rights of their workers while benefiting from the flexibility of international postings.
By familiarizing yourself with the legal requirements and proper procedures for posting workers, your business can make the most of its global workforce without running afoul of local regulations.
Case Study 1
Case Background
Posting of a European Employee of a multinational automobile company from Germany to Spain.
This year we had the following case: a German employee whose German company wanted to post to a centre of work in Spain for more than 18 months.
Case Strategy
Immigration:
When European employees are posted to Spain, it is essential to comply with the EU regulations. In this sense, European workers enjoy free movement within the European Union, but even so, when they spend more than three months in Spain they must register here and obtain the European Union (EU) Certificate. In this sense, we moved the worker to Spain and obtained the said EU certificate.
Social Security:
In the area of Social Security, the employees must understand the differences in the systems between Germany and Spain. In this regard, there are two possibilities: that the German company requests an A1 certificate for the German employee, ensuring that social security will be paid in Germany during the period of posting; or that the employee is registered in the Spanish social security system during the time he is posted in Spain.
In either case, the social security obligation is unavoidable, regardless of the period of the assignment, because the risk that the employee has an accident during the working day must be covered and it must be clarified which social security authority covers it.
In this sense, as it was a temporary posting, the German company requested a coverage certificate so that the employee would be covered during the time he was in Spain.
National Labour:
In terms of National Labour, employees must respect Spanish labour legislation. This includes work agreements, working hours and specific conditions related to the sector of activity.
This requirement is imposed by the Spanish authorities to avoid the risk of social dumping, which is a practice whereby employers use cheaper labour than is usually available at their place of production or sale, for example by moving production to a country or area with higher wages low or employing low-paid migrant workers.
In this sense, we analyzed the company’s labour documents to guarantee that they complied with the labour regulations in Spain.
International Labour:
As we explained in the previous publication, the posting of the worker must be communicated to the corresponding labour authority in the Autonomous Community in which the worker is going to render his services. This communication must be made before the posting takes place, since otherwise the posting company may be fined, either for not communicating the posting or for communicating it late.
However, when the company providing services estimates that the effective duration of the posting is going to be longer than twelve months, it must send to the labour authority, before the expiration of the indicated term, a reasoned notification, which will extend up to a maximum of eighteen months the application of the working conditions provided for in the Spanish labour legislation.
In this sense, we communicated the assignment to the Spanish labour authority before the posting of the German worker.
Tax:
From a Tax point of view, it is crucial to determine the tax residence of the employees and to apply the tax treaties between Spain and Germany to avoid double taxation. Since the employee would spend more than 183 days in Spain, Spanish tax obligations would come into play when becoming a tax resident in Spain.
Additionally, we must analyze the risk of permanent establishment. Permanent establishment risk applies when a company begins trading within the borders of a country and obtains income from that commercial activity. In terms of law enforcement, a country’s tax agencies are the final arbiter of permanent establishment.
In this sense, given that the German worker was going to spend more than 183 days in Spain, we gave him correct tax advice and covered his obligations in Spain.
Case Outcome: Success!
The result of this work was the following scenario:
- Before coming to Spain, the company requested a coverage certificate to maintain their Social Security contributions in Germany.
- Before coming to Spain, we analyzed his contract to check that the company met the minimum conditions required by the labour authority in Spain.
- Before coming to Spain, we communicated his posting to the corresponding labour authority in the autonomous community in which he provided his services (international labour).
- Once in Spain, we obtained an appointment to request his European certificate.
- After having resided in Spain, as was going to spend more than 183 days here, we took corresponding steps required by the tax authority upon becoming a tax resident. Additionally, analyzed the risk of permanent establishment.
How Can We Help You?
Schedule a free consultation below and one of our lawyers will be in touch.
Case Study 2
Case Background
Posting of a British Worker to Spain by a multinational company in the audiovisual sector.
This year we had the following case: an employee of British nationality whose British company wanted to transfer to a company in Spain for two months.
Case Strategy
Immigration:
For non-EU workers, the process of obtaining visas and work permits is critical. Depending on the nature of the work, it may be necessary to apply for a temporary work visa or residency. In this case, since it is a trip of less than three months, you could come as a tourist if your work will be in the audiovisual sector.
In case of a trip of more than three months, we should apply for a visa. In this case, the most appropriate could be the intra-company transfer, although we must analyze the qualifications of the workers to confirm that they meet the requirements.
Social Security:
British national workers remain under the applicable EU social security regime, so they must apply for an A1 for the time they are posted. The alternative is to register within the social security system in Spain.
In this case, the company requested the coverage certificate.
National Labour:
Adaptation to Spanish labour legislation is vital. Employment contracts, working hours, vacation days and other labour aspects must be adjusted to local regulations.
In this sense, we analyzed the company’s labour documents to guarantee that they complied with the labour regulations in Spain.
International Labour:
As we explained in the previous publication, the worker’s posting must be communicated to the corresponding labour authority in the Autonomous Community where the worker is going to render his/her services, as this obligation to communicate their posting also applies to British nationality workers, even in postings of two months. This notification must be made before the posting takes place, since otherwise the posting company may be fined, either for not notifying the posting or for late notification.
In this sense, we communicated the assignment to the Spanish labour authority before the posting of the British worker.
Tax:
Tax is also a crucial aspect. The determination of tax residency and the application of tax agreements between Spain and the UK are fundamental to avoiding tax conflicts.
In both cases, specialized legal advice is essential to ensure compliance. Companies should be aware of the legal differences between their home countries and Spain, ensuring a successful relocation.
Case Outcome: Success!
The result of this work was the following scenario:
- Before coming to Spain, the British worker discussed with his company whether they would request a coverage certificate to maintain their Social Security contributions in the UK or if, on the other hand, he would be registered in the Social Security regime in Spain. Finally, they decided to request the certificate of coverage.
- Before coming to Spain, we must analyse if his contract meets the minimum conditions required by the labour authority in Spain (National Labour).
- Before coming to Spain, we communicated his posting to the corresponding labour authority in the autonomous community in which he will provide his services (International Labour).
- Once in Spain, given that he can come with a tourist visa and reside legally for up to 90 days in a period of 180 days, he came with a tourist visa.
- After having resided in Spain, as he was not going to spend more than 183 days here, the obligations as a tax resident will not come into force and there will be no risk of permanent establishment.
Case Study 3
Case Background
Posting Workers from the U.S. to Spain
This year we had the following case: an employee of U.S. nationality working for a U.S. company who wanted to come to telework in Spain for three years.
Case Strategy
Immigration:
For non-EU workers, the process of obtaining visas and work permits is critical. In this specific case, given that the worker is of non-EU nationality and wants to come to Spain to telework, we could be in the case of a permit for Digital Nomads. We will have to analyze if he meets the requirements to be able to provide the documentation to the Spanish authority and proceed to request the permit.
In this case, we applied for a Digital Nomads Visa in Spain.
Social Security:
U.S. workers should understand the social security implications. When applying for a permit for teleworkers, it is mandatory in case of employees to provide a certificate of coverage when there is a bilateral agreement on social security (between Spain and the U.S. there is) or, alternatively, that the American company registers in Spain and registers the worker, but in that case the scenario could change and become an intra-company transfer. When the worker is self-employed, he/she only needs to file an affidavit of registration with the RETA once the permit is granted.
In this case, the company requested a certificate of coverage.
National Labour:
Adaptation to Spanish labour legislation is vital. Employment contracts, working hours, vacation days and other labour aspects must be adjusted to local regulations.
In this sense, we analyzed the company’s labour documents to guarantee that they complied with the labour regulations in Spain.
International Labour:
Given that the company of origin is in the United States (that is, outside the European Union), the obligation to communicate the posting to the labour authority in Spain would not apply.
Tax:
Tax is also a crucial aspect. The determination of tax residency and the application of tax agreements between Spain and the United States are fundamental to avoiding tax conflicts.
In both cases, specialized legal advice is essential to ensure compliance. Companies should be aware of the legal differences between their home countries and Spain, ensuring a successful relocation.
Case Outcome: Success!
The result of this work was the following scenario:
- Before coming to Spain, the American worker discussed with his company whether they would request a coverage certificate to maintain their Social Security contributions in the US or if, on the other hand, he would be registered in the Social Security regime in Spain. This document is mandatory and necessary for the next steps (request for a permit in Spain). In the end, the company requested the certificate of coverage.
- Before coming to Spain, we analyzed if his contract met the minimum conditions required by the labour authority in Spain (national labour).
- Before coming to Spain, we did not communicate his posting to the corresponding labour authority in the autonomous community in which he will provide his services (International Labour) because it was not mandatory.
- Once in Spain, we submitted his application for the corresponding permit while he was legal in Spain, and the authority answered within 20 business days to give us a positive response. Also, we can apply to the Spanish consulate in the US before coming to Spain.
- After having resided in Spain, as he was going to spend more than 183 days here, we took the corresponding steps required by the tax authority upon becoming a tax resident.
Conclusion: How Lexidy’s Global Mobility Team Can Help
If you’re considering posting workers to Spain or are navigating the complexities of the Global Mobility of employees, Lexidy is here to assist you.
In these complex situations in which obligations arise in countries of origin and destination and multiple rules apply in different legal areas, it is essential to have adequate advice and a firm that provides services in an integrated and effective manner, with experience in the sector, as is the case of our Global Mobility department.
To learn more about our services or to get started on your Global Mobility journey, don’t hesitate to reach out. You can contact Sandra Faura, our star of Global Mobility at Lexidy, directly at sandra.faura@lexidy.com. Alternatively, fill out the form below, and one of our legal eagles will be in touch to tailor our services to your specific needs.
