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An employment contract is an agreement between an employer and an employee whereby the employee undertakes to provide certain services under the employer's authority and direction, in exchange for remuneration.
A contract may be concluded in writing or verbally. However, if concluded verbally, either party may request at any point during the employment relationship that it be formalised in writing.
There are certain cases in which a written contract is mandatory: training and apprenticeship contracts, part-time contracts, home-working contracts, contracts for a specific project or service, and contracts for employees hired in Spain to work abroad for Spanish companies.
Employment contracts may be of indefinite duration (permanent) or for a fixed term (temporary). All contracts are presumed to be permanent and full-time unless expressly stated otherwise.
A permanent contract is one concluded without setting any limit on its duration. It may be written or verbal and must be registered with the Employment Office within ten days of being agreed.
SUBSIDISED PERMANENT CONTRACTS:
· PERMANENT CONTRACT FOR UNEMPLOYED WOMEN:
Requirements:
· The worker must be registered with the Public Employment Service and must meet at least one of the following criteria: be aged between 16 and 45, be hired for occupations with a lower rate of female employment, or be hired within the two years following childbirth.
Incentives:
· Hiring of unemployed women aged between 16 and 45: a 25% reduction in Social Security contributions for the 24 months following the date of hire.
· Hiring of women in occupations with a lower rate of female employment:
a) As a general rule: 35% reduction for the 24 months following the date of hire.
b) Women registered continuously with the Public Employment Service for at least 6 months, or aged over 45:
- First year: 70%
- Second year: 60%
· Registered women hired within 24 months of childbirth: 100% reduction for the 12 months following the date of hire.
· PERMANENT CONTRACT FOR JOBSEEKERS REGISTERED AS UNEMPLOYED FOR 6 MONTHS OR MORE:
Requirements:
· Must be unemployed and continuously registered with the Public Employment Service (SEPE) for 6 months or more.
Incentives:
· 20% reduction in Social Security contributions for the 24 months following hiring.
· Full-time contracts with unemployed women attract an additional ten percentage points on top of the standard bonus.
· PERMANENT CONTRACT FOR WORKERS AGED OVER 45:
Requirements:
· Must be unemployed and registered with the Public Employment Service (SEPE).
· Must be over 45 years of age.
Incentives:
· Workers aged 45–55: 50% reduction in the first year, 45% for the remaining term of the contract.
· Workers aged 55–65: 55% reduction in the first year, 50% for the remaining term of the contract.
· PERMANENT CONTRACT FOR RECIPIENTS OF UNEMPLOYMENT BENEFITS:
Requirements:
· Must be unemployed and registered with the Public Employment Service (SEPE), and be receiving unemployment benefit or a subsidy, with at least 1 year of entitlement remaining at the time of hiring.
Incentives:
· 50% reduction in the first year and 45% in the second year.
· For full-time contracts with unemployed women, the bonuses are increased by ten percentage points.
· PERMANENT CONTRACT FOR UNEMPLOYED WORKERS RECEIVING UNEMPLOYMENT subsidy OR AGRICULTURAL INCOME, REGISTERED UNDER THE SPECIAL AGRICULTURAL SCHEME:
Requirements:
· The worker must be unemployed and registered with the Public Employment Service, and must be receiving unemployment subsidy, applicable to workers registered under the Special Agricultural Scheme of Social Security, or agricultural income.
Incentives:
· Reduction of the employer's Social Security contribution for common contingencies of 90% in the first year and 85% in the second year.
· PERMANENT CONTRACT FOR WORKERS ADMITTED TO THE ACTIVE INTEGRATION INCOME PROGRAMME:
Requirements:
· The worker must be unemployed and registered with the Public Employment Service, and must have been admitted to the Active Integration Income Programme.
Incentives:
· A reduction of 65% on Social Security contributions for the 24 months following the hiring date, and 45% for the remainder of the contract's duration if the employee is aged between 45 and 55; or 50% for the remainder of the contract if the employee is aged between 55 and 65.
· Contracts entered into with unemployed women in this group on a full-time basis will benefit from a ten-percentage-point increase in the applicable reduction.
It should be noted that there are common requirements applicable to all incentivised contracts mentioned above:
· b> The employee must not be related by blood or marriage up to and including the second degree to the employer, or to any person in a management position or serving as a member of the governing bodies of a company.
· The employee must not have been linked to the company by a permanent contract in the 24 months prior to hiring.
· In the case of worker-members joining cooperatives or labour companies, those who have previously maintained a contractual relationship with the same entity for more than 12 months will be excluded from any contribution reductions.
These incentives will also apply to all self-employed workers registered since at least 1 January 2005 who hire individuals from the vulnerable groups listed above. In such cases, the specified bonuses will be increased by 5 percentage points.
