Spain implements new labor transparency and AI disclosure laws

Spain has implemented Royal Decree 723/2026, which came into effect on October 5, 2026. This regulation partially transposes EU Directive 2019/1152, aiming to increase transparency and predictability in labor relations.

Under the new law, companies must provide written information regarding essential employment conditions. This includes details on salary calculation, working hours, shifts, vacation time, and collective bargaining agreements. For new contracts, these details must be specified upfront. For existing employees, workers have the right to request updated information, which companies must provide within 30 business days.

A significant component of the decree is the requirement for transparency regarding algorithmic management. Employers must disclose if they use artificial intelligence or automated systems to influence working conditions, such as task allocation, shift scheduling, performance monitoring, or promotion decisions. Companies must explain the criteria and rules guiding these systems without necessarily revealing proprietary code.

The regulation also addresses the use of probationary periods. Companies must now justify any extension of a probationary period beyond six months, specifying the exact nature of the tests required to pass. This measure is intended to prevent the misuse of long probationary periods to mask temporary employment.