Employment Law in Spain 2026: Regulatory Consolidation and New Compliance Challenges

The employment law landscape in Spain in 2026 is defined by the consolidation of recent reforms, the strengthening of enforcement mechanisms, and an increasing emphasis on worker protection across multiple fronts. The legislative cycle that began with the 2021 labour reform and continued through successive regulatory developments has entered a phase of practical application, requiring companies to translate legal obligations into operational realities.

For companies operating in or from Spain, 2026 poses a dual challenge: adapting to rules that are already fully effective following transitional periods, while simultaneously anticipating the impact of proposals still undergoing parliamentary proceedings. The interplay between EU-driven directives and national political dynamics adds an additional layer of complexity to an already demanding compliance environment.

This article provides a structured overview of the most relevant labour law developments shaping the Spanish market in 2026, with practical implications for employers and their advisers.

The 37.5-hour workweek: a rejected reform with lasting effects on collective bargaining

Following a prolonged parliamentary debate, the bill to reduce the maximum statutory working week from 40 to 37.5 hours was ultimately rejected during its parliamentary proceedings in 2026, after the partial implementation of an initial phase (38.5 hours) had already taken effect in late 2025. As a result, the general statutory limit remains at 38.5 hours, and the further reduction to 37.5 hours did not become mandatory, except where a collective bargaining agreement already establishes shorter working hours.

The rejection does not eliminate the practical relevance of shorter working weeks. Many companies had already begun adjusting their internal working-time organisation frameworks in anticipation of the reform, and numerous collective bargaining agreements voluntarily incorporated reductions below 40 hours that remain in force irrespective of the bill’s failure. For sectors reliant on shift work, such as retail, logistics, and hospitality, any such voluntary reduction still requires recourse to flexibility arrangements under Royal Decree 1561/1995, of September 21st, on special working hours.

Collective bargaining has nonetheless been significantly influenced by the broader debate. Numerous sectoral agreements signed in 2025 and early 2026 proactively incorporated reductions in annual working hours, in some cases below the 37.5-hour threshold the bill would have imposed, and these voluntary reductions remain applicable, notwithstanding the bill’s rejection. Employers negotiating new collective bargaining agreements must take these developments into account, as employee representatives may still expect a shorter working week despite the legislative setback.

An area of particular concern relates to the treatment of irregular working time distribution under the collective bargaining agreements that already reduced hours voluntarily. Many such agreements allow employers to distribute up to 10% of annual hours irregularly, and as the total annual count decreases under these voluntary schemes, the margin for irregular distribution narrows proportionally. This situation has generated conflicts across various sectors, and employers must review their scheduling flexibility carefully under applicable agreements.

Digital time recording: the national registration platform

One of the most operationally significant developments of 2026 is the planned launch of the national digital platform for real-time working hours registration. This system rests on the pre-existing time-recording obligation under Article 34.9 of the Workers’ Statute and proceeds independently of the rejected working-hours reduction bill, requiring employers to transmit employee clock-in and clock-out data to the labour authority through a centralised digital interface.

The platform eliminates the previous regime under which companies could maintain internal records in any reasonable format. Going forward, the system imposes standardised, real-time data transmission, enabling the Labour Inspectorate to monitor compliance remotely and identify anomalies without the need for on-site inspections.

For employers, this represents a fundamental shift in time-recording compliance. Traditional systems, spreadsheets, manual sign-in sheets, and decentralised applications will no longer be sufficient. Companies must invest in compatible digital tools capable of interfacing with the national platform. The transitional adaptation period is expected to be limited, and companies that act early will benefit from reduced sanction risk.

The sanctioning regime associated with this obligation has also been reformed. Violations related to time-recording, including failure to register, incomplete data, or indications of manipulation, are now sanctioned per affected worker rather than as a single infringement per company. For large employers, this multiplier effect can result in penalties of hundreds of thousands of euros in cases of systematic non-compliance.

Digital disconnection: a reform that did not survive

The now-defeated bill to reduce the maximum statutory working week to 37.5 hours also proposed strengthening the right to digital disconnection under Article 20 bis of the Workers’ Statute, framing it as an unwaivable right encompassing freedom from work-related communications and service requests outside legally or contractually established working time, regardless of channel. Exercising the right could not trigger adverse consequences, such as penalisation for failing to respond to work communications during rest periods, leave, or vacation. This would have gone further than the existing framework under Organic Law 3/2018 and, for remote work, Law 10/2021, which focus on internal policies rather than an explicit prohibition on off-hours work demands. The reinforced right was conceived as inseparable from the working-time reduction and the new digital time-recording system, sharing the aim of curbing hyperconnectivity. However, because the bill was rejected during parliamentary proceedings, this reinforced disconnection regime never entered into force.

Pay transparency: transposition of the European Directive

The deadline for transposing the EU Pay Transparency Directive (EU) 2023/970 expired on 7 June 2026, marking a turning point in corporate pay management. Although Spain already had obligations regarding equal pay (pay registers, audits, equality plans, and job evaluation systems), the Directive significantly raises the level of requirements, extending transparency across all phases of the employment relationship, from recruitment to career advancement.

Among the most relevant aspects are:

• the obligation to inform candidates about the salary range for the position and the prohibition on asking about their pay history;
• workers’ right to know the applicable pay criteria and to request comparative information broken down by gender (response deadline: two months); and
• new periodic reporting obligations on the gender pay gap, with a staggered schedule depending on company size (250+ employees: annually from June 2027; 150-249: every three years from that date; 100-149: every three years from June 2031).

The Directive introduces a corrective mechanism where the pay gap reaches at least 5% in a category of workers without objective justification: if not corrected within six months, a joint pay assessment must be conducted with employee representatives. This threshold does not replace the 25% threshold already provided for in Article 28 of the Workers’ Statute and Royal Decree 902/2020 but operates as an additional mechanism. Furthermore, complaint mechanisms are strengthened, including the reversal of the burden of proof when transparency obligations are breached, which will increase companies’ exposure to claims for unjustified pay differences.

Pay transparency will require companies to review how they define positions, allocate supplements, document promotions, and explain their pay decisions. It will be necessary to have coherent, traceable, and defensible pay systems vis-à-vis the workforce, employee legal representatives, and competent authorities.

Artificial Intelligence in the workplace: regulatory framework and employer obligations

The European Artificial Intelligence Regulation, which entered into force in August 2024 with staggered application dates, is producing direct consequences for labour practices in 2026. Systems used for hiring, performance evaluation, task allocation, and workforce management decisions are classified as “high risk” under the Regulation, subjecting employers deploying such tools to specific transparency, oversight, and governance requirements.

Employers using AI-based tools in human resources decision-making must ensure human oversight of automated decisions, provide clear information to affected workers about the use of such systems, and conduct fundamental rights' impact assessments when tools are deployed at scale. The obligation to inform employee representatives about the introduction and logic of algorithmic management systems has been reinforced through recent interpretive guidance from the European Commission.

In Spain, the Workers’ Statute already provides for the right of employee representatives to be informed about the algorithmic parameters affecting working conditions. However, the practical scope of this right and the level of detail required in such communications are subject to ongoing litigation. In 2026, several proceedings before Spanish labour courts have involved challenges against automated shift-scheduling tools, performance-rating algorithms, and AI-based candidate-selection platforms.

Companies must conduct a comprehensive inventory of AI tools used throughout the employee life cycle, classify them according to the risk categories established by the AI Regulation, and ensure that adequate governance, transparency, and audit mechanisms are in place. Documentation of human oversight procedures will be essential for defending decisions challenged on algorithmic grounds.

Whistle-blowing channel compliance: enforcement intensifies

Spain’s transposition of the European Whistle-blower Protection Directive through Law 2/2023 imposed on companies with 50 or more employees the obligation to establish internal reporting channels. Although the law has been in force since mid-2023, enforcement activity was initially limited. In 2026, however, the Labour Inspectorate and other competent authorities have begun to verify compliance systematically.

Companies must have an operational, accessible, confidential internal reporting channel managed by an independent person or body. The channel must accept both written and verbal reports, and the company must acknowledge receipt within seven days and provide a response within a maximum of three months. Any retaliation against whistle-blowers is expressly prohibited, including dismissal, demotion, or detrimental modification of working conditions, and such measures may be declared null and void.

Non-compliance carries considerable sanctions. For companies that fail to implement an internal channel, or implement a deficient one, fines can reach up to EUR1 million in the most serious cases. Even moderate infractions, such as failure to meet response deadlines or insufficient confidentiality safeguards, can result in fines of up to EUR300,000.

Employers must ensure that their reporting channels are not merely formal. The system must be genuinely operational, periodically tested, and supported by clear internal investigation and resolution protocols. Training for personnel responsible for managing the channel is also advisable, particularly regarding data protection obligations associated with the handling of reports.

LGBTI equality plans: first compliance cycle and enforcement activity

Following the entry into force of Royal Decree 1026/2024, which regulates in detail the content and procedure for LGBTI equality plans, 2026 represents the first full year of active compliance and enforcement. Companies with 50 or more employees that have not adopted a negotiated plan are already in breach of the regulation, and the Labour Inspectorate has incorporated this obligation into its standard inspection protocols.

Enforcement activity in this area has revealed a significant gap between formal adoption and substantive implementation. Many companies have approved plans that, upon closer examination, lack specific and actionable measures, fail to designate a person responsible for implementation, or do not include the mandatory protocols for the prevention and management of harassment based on sexual orientation or gender identity.

The sanctioning regime is significant: non-compliance can result in fines of up to EUR225,000, exclusion from public procurement processes, and loss of access to public subsidies. Companies must review their plans to ensure they meet the minimum content requirements, including anti-harassment protocols, inclusive hiring measures, training actions, and the clear designation of an implementation co-ordinator.

Disability and reasonable accommodations: evolving standards

Building on judicial developments in 2024 and 2025 relating to the duty to accommodate workers declared permanently disabled, Spanish courts have continued to raise the standard in 2026. The doctrine requiring employers to demonstrate documented, individualised, and good-faith efforts to adapt the position or reassign the worker before resorting to contract termination is now firmly established.

Among the new developments in 2026 is a growing body of case law addressing the intersection between disability, long-term temporary incapacity, and dismissal. Courts are increasingly scrutinising dismissals that occur shortly after a worker’s return from prolonged medical leave, applying a presumption that the dismissal may be linked to the underlying health condition. In such cases, the burden of proof shifts to the employer, who must demonstrate objective and non-discriminatory reasons for the termination.

The concept of reasonable accommodation is also being applied more broadly. Beyond physical workplace adaptations, courts now recognise that schedule adjustments, task redistribution, remote work arrangements, or modification of performance targets may constitute reasonable accommodations that the employer has an obligation to consider before concluding that the employment relationship cannot be maintained.

Employers must establish clear internal procedures for managing returns from long-term leave, including structured fitness assessments, documented accommodation discussions, and formal records of alternatives considered. Failure to follow this process significantly increases the risk that a dismissal will be declared null and void on grounds of discrimination.

Remote work: continued judicial clarification

The framework established by the Remote Work Law (Ley 10/2021, de 9 de julio, de Trabajo a Distancia – LTD) continues to generate judicial interpretation in 2026, particularly regarding expense compensation, the right to reversibility to in-person work, and the limits of employer control over remote workers.

Courts have confirmed that the right to expense compensation is directly enforceable under the law and cannot be conditioned on the conclusion of a collective bargaining agreement. Where no agreement exists, individual remote work arrangements must specify the mechanism for compensating or reimbursing expenses incurred by the worker. Clauses that defer this obligation indefinitely or condition it on future negotiations have been struck down.

The issue of digital surveillance of remote workers has also gained greater prominence. While employers retain the right to monitor productivity and ensure compliance with working time obligations, courts apply strict proportionality standards. Continuous screen recording, keystroke logging, and GPS tracking outside working hours have been challenged as disproportionate intrusions on the worker’s right to privacy and digital disconnection. Employers must ensure that monitoring tools are disclosed, limited to what is strictly necessary, and consistent with data protection principles.

Sustainable mobility: new employer obligations under Law 9/2025

Law 9/2025, of December 3rd, on Sustainable Mobility introduces new obligations affecting commuting to the workplace, an area with direct impact on both business management and labour relations. Under Article 26, workplaces with more than 200 employees (or 100 per shift) must adopt a Sustainable Mobility to Work Plan within twelve months of the law’s entry into force, an obligation that also applies to certain public-sector entities. These plans must be negotiated with employee representatives or, in the absence of representation, with a bargaining commission formed by company representatives and legitimated trade unions.

Substantively, plans must promote active mobility, low-emission transport, shared and collaborative mobility, charging infrastructure for zero-emission vehicles, teleworking where feasible, and organisational flexibility, alongside road-safety and accident-prevention training extending to visitors and suppliers. Plans require periodic monitoring, with implementation reports due two years after approval and biennially thereafter, and must be registered in the Integrated Mobility Data Space. While the law creates no new individual rights to teleworking or flexible schedules, it enables tax-favoured transport vouchers under existing personal income tax rules and contemplates subsidies for companies with more than 100 employees (or 50 per shift). Law 9/2025 thus establishes sustainable mobility as a new compliance area requiring planning, negotiation, and ongoing monitoring.

Pre-dismissal hearing for disciplinary dismissals: practical consolidation

The mandatory pre-dismissal hearing requirement established by the Supreme Court in late 2024 has been fully incorporated into standard practice but continues to generate litigation when employers fail to implement it correctly. Throughout 2025 and into 2026, lower courts have provided additional guidance on what constitutes an adequate hearing.

The key principles that have emerged are as follows:

• The hearing must take place before the final dismissal decision is communicated; simultaneous notification is insufficient.
• The worker must be informed of the specific facts alleged against them, not merely generic references to categories of misconduct.
• A reasonable period must be granted for the worker to prepare and submit their response; same-day or immediate hearings may be considered inadequate.
• The employer’s assessment of the worker’s submissions must be genuine; there must be evidence that the defence was considered effectively before the final decision was made.

Companies that have not yet updated their disciplinary procedures remain exposed to automatic unfair dismissal rulings, regardless of the severity of the underlying conduct. Internal HR protocols and template documentation must be revised to incorporate this requirement as a standard procedural step.

Maternity and paternity leave: the new framework in full operation

Royal Decree-Law 9/2025, which extended maternity leave to 19 weeks for the birth mother (and up to 32 weeks for single-parent families), is now fully operational. The expanded leave framework, which includes mandatory, discretionary, and parental care components, requires employers to manage more complex absence patterns and more elaborate return-to-work transitions.

The additional two weeks of parental care leave (four for single-parent families), available until the child turns eight years old, represent a novel form of fragmented leave that challenges traditional workforce planning. Employers must accommodate requests for intermittent weekly leave periods distributed over several years, requiring robust tracking systems and flexible staffing arrangements.

Courts have confirmed that the leave period counts as effective working time for all purposes, including seniority accrual, bonus calculations, and vacation entitlements. Any unfavourable treatment linked to the exercise of these rights, including denial of promotion opportunities or exclusion from variable compensation programmes, may constitute discrimination on grounds of gender or family status.

Limits on Labour Inspectorate Powers When Conducting Investigative Activities Through Workplace Visits

The Supreme Court ruling of April 2026 expanded the protection of the constitutionally protected registered office of certain legal entities. According to this doctrine:

• if the workplace coincides with a space constituting the constitutionally protected domicile of the company (for example, certain offices where the management of the company is conducted or confidential documentation is stored), the Inspectorate requires consent or judicial authorisation to access that part of the premises;
• conversely, strictly productive areas or those open to work activity may continue to be inspected without prior authorisation, provided they are clearly differentiated.

This ruling has generated intense debate because it particularly affects many small and medium-sized enterprises.

Case Law Delimitation of Hospitalisation Leave

The regulation of hospitalisation leave has undergone a very significant evolution since the reform introduced by Royal Decree-Law 5/2023, which amended Article 37.3(b) of the Workers’ Statute. However, it is the case law of 2025 and, especially, of 2026 that has ultimately defined its scope. The trend is clearly pro-worker: the Supreme Court is interpreting the leave based on its care-giving purpose, rather than from a rigid or formalistic criterion.

Traditionally, the leave was strictly linked to hospital admission, with the dominant interpretation being that it had to begin immediately upon hospitalisation and that hospital discharge could end it. The new doctrine abandons this view: the Supreme Court understands that the legally protected interest is not the hospital admission itself, but the need for the worker to provide effective care to the family member.

The most relevant ruling is STS 126/2026, of February 4th. Until then, many companies required that the leave begin on the day of hospitalisation or the first working day immediately thereafter. However, the Supreme Court rejected this interpretation, allowing the worker to decide when to start the leave, provided the justifying situation persists and the hospitalisation or legally protected need for care continues. The Court’s reasoning is clear: requiring the leave to be consumed from the outset may deprive it of practical utility, as care-giving needs tend to intensify during the clinical process rather than on the day of admission.

Another key issue is whether the leave ends automatically when the patient leaves the hospital. The Supreme Court clearly distinguishes between hospital discharge, which does not necessarily extinguish the leave, and medical discharge: if the patient remains on medical leave with prescribed home rest requiring care, the leave may be maintained. In other words, hospital admission ceases to be the sole relevant factor; what becomes determinative is whether the care-giving necessity persists.

However, this flexibility is not absolute. The National High Court, in a ruling reviewed by the Supreme Court, holds that the leave cannot be initiated after hospital discharge if only ordinary home care remains and the legal basis for the leave no longer exists.

In summary, hospitalisation leave must be taken on working days and recent case law has transformed it from a leave rigidly linked to hospital admission into a genuine family care-giving leave, based on the following principles:

• Flexibility in the timing of commencement, provided that the triggering event persists.
• Distinction between hospital discharge and medical discharge, such that hospital discharge does not automatically extinguish the right if care with home rest continues to be necessary.
• Computation in working days, as it is a leave intended to justify absence from work.
• Purposive interpretation, prioritising the effectiveness of the right to care over strictly literal or formalistic readings.

Conclusion

The employment landscape in Spain in 2026 demands a proactive, compliance-oriented approach from employers. The convergence of national reforms and EU-driven obligations generates a dense regulatory landscape in which the margin for error is progressively narrowing. Companies that invest in preventive compliance, rigorous documentation, and early adaptation to new requirements will be better positioned to manage labour risks effectively in this constantly evolving environment.