New law for illegal employment in Spain

The Ministry for Work and Immigration will confirm the number of workers who are legally registered when figures for the end of July are released. Yesterday the deadline for employers to voluntarily register workers who do not have a legal work contract in order to avoid new higher fines ran out. A new law passed in May included measures for the regularization and control of illegal workers. Employers have had from the beginning of May until the end of July to register workers with the social security system and therefore make them legal. In order to do this employers will have to pay the social security contributions that they have avoided paying until now but have been given a period of grace in order to do this and will be able to pay in installments. In addition they will need to have offered either a permanent or a minimum 6 month temporary contract to these employees. In these contracts employers are obliged to declare that they are taking part in the process of regularization established under the new law which comes into effect today.

The fines for not offering a legal contract to illegal employees have been increased dramatically and according to the Minister for Work and Immigration, Valeriano Gómez, these could be as much as 300% more than previously. Under the new law the fine for not registering an employee with social security has increased from between 625 euros to 6,250 euros to a minimum of 3,126 euros and a maximum fine of 10,000 euros. The new law also states that companies who contract or subcontract services need to check that employees who carry out work for them are registered with social security before this work is carried out. The minimum fine for people working and also claiming unemployment benefit or other social security benefits has gone up from 6,251 euros to 10,001 euros. The maximum remains at 187,515 euros.

The fines for employees will be calculated for each individual employee affected. However, families who contract workers to build or carry out repairs on their homes will be exempt. Employers found guilty of serious infractions of the new law will automatically lose any funds they receive under employment schemes and will lose access to these for a maximum period of two years. Furthermore they will be forced to repay any money illegally gained in this way.

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