Spanish labor market and regulatory changes

The Spanish labor market is undergoing shifts in compensation strategies and regulatory requirements. Businesses are responding to rising labor costs—which reached an average gross of 38,748.94 euros per worker in 2025—by adopting selective salary planning and flexible remuneration, such as tax-exempt health insurance.

Parallel to these corporate trends, the Spanish Government has approved a Royal Decree to transpose a European Union directive focused on contract transparency. This regulation requires employers to provide detailed written information regarding salaries, working hours, and collective agreements. Specifically, companies must provide an explicit breakdown of base salaries, variable compensation, and all bonuses, alongside exact working hours, shift patterns, and rest periods.

The decree also introduces mandates for disclosing the use of algorithms or automated systems that influence decisions regarding hiring, task assignment, professional progression, or contract termination. Furthermore, it imposes stricter controls on probationary periods; while the general legal limit remains six months, any extension via collective bargaining must now be rigorously justified with specific criteria and tasks used for evaluation.

To assist with the transition, the Ministry of Labour has provided a 20-day grace period for compliance, while existing employees may request missing information, which must be provided within 30 days. The Spanish Confederation of Employers' Organizations (CEOE) has expressed dissatisfaction and is considering legal challenges, arguing the decree may infringe upon the hierarchy of laws and the existing Workers' Statute.