The possibility of working remotely is a new reality that brings major advantages, but it has also led to a great deal of confusion. Does your company hire professionals who work from outside Spain? You’re not alone; it’s a practice that is becoming increasingly common. International remote work has transformed hiring practices because at first glance it may appear cheaper and less complicated. However, it's essential to do things properly, as the legal risks remain very real and can be extremely serious: from liability for workplace accidents to fines for employing foreign workers without the right permits, or even claims arising from bogus/false self-employment.
How can you hire remote workers from Spain?
In this video labour lawyer, Josep Conesa, explains in Spanish the implications of hiring remote workers and how to avoid problems with the Labour Inspectorate and false self-employment lawsuits.
HOW TO TELL IF AN INTERNATIONAL FREELANCER CONTRACT IS ACTUALLY AN EMPLOYMENT RELATIONSHIP
Many companies hire professionals abroad under a freelance contract. The worker issues invoices, but in reality:
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They use the company’s software.
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They follow set working hours.
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They are provided with a corporate laptop.
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They receive direct instructions.
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They work for Spanish clients.
In such cases, the commercial contract – however well drafted – merely disguises what is in fact an employment relationship. In other words, they could easily be deemed a false/bogus freelancer (falso autónomo).
From our 40+ years of experience as employment lawyers, everything runs smoothly – until it doesn’t. And when problems do arise, the risks are significant: nowadays it’s easier than ever for workers abroad to hire a lawyer, and both the Labour Inspectorate and the courts can readily conclude that the relationship is truly employment. This means the company may have to recognise the employment relationship and/or pay Social Security contributions retroactively for up to four years, with surcharges and interest, in addition to potential compensation for a dismissal or even the full capitalisation of an incapacity pension if no contributions were made.
Why? Because Spain’s Workers’ Statute establishes the basic rights of any employee hired by a Spanish company, regardless of whether they work remotely from another country. These rights include:
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Paying contributions as for any other employee.
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Observance of applicable Collective Bargaining Agreements.
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Working time registration and the right to digital disconnection.
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Access to the same cover in the event of a workplace accident.
What happens if a remote worker abroad provides services for a Spanish company without a work permit?
Article 37 of the Law on Social Order Infringements and Sanctions (Ley de Infracciones y Sanciones del Orden Social) states that employing foreign workers without the required permit is an offence, with sancions being applied for each foreign affected.
Article 37. Infringements.
The following shall be considered very serious infringements:
1. Employers who engage foreign workers without having previously obtained the required work permit, or its renewal, committing an infringement in respect of each foreign worker employed.
2. Foreign nationals who carry out in Spain any gainful, employment or professional activity, on their own account, without having obtained the required work permit, or without having renewed it.
3. Natural or legal persons who promote, facilitate or condone the employment of foreign nationals in Spain without the required work permit.
International remote work is not exempt from these obligations, nor from compliance with Spain’s Remote Work Act (Ley del Teletrabajo) or the Law on the Prevention of Occupational Risks (Ley de Prevención de Riesgos Laborales (LPRL)). Employers must ensure that remote workers – even if based abroad – enjoy appropriate health and safety conditions.
WHAT HAPPENS IF A REMOTE WORKER ABROAD SUFFERS A WORKPLACE ACCIDENT?
International workplace accidents are a real risk. Imagine:
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Someone in Argentina works exclusively for a Spanish company, logging into its systems daily.
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During working hours, they suffer an accident at home.
If the relationship is deemed employment, Spanish labour law may apply, meaning the company, even if operating from Barcelona, would be liable for incapacity benefits, sick pay, or claims brought before the courts. In other words: an accident which took place while working remotely abroad can still be classed as a workplace accident under Spanish law, provided dependence and subordination are established.
The severity lies in the fact that, if the worker wasn’t registered with Social Security, the employee or the social security authorities may demand the capitalised value of the entire pension. That means the company could be liable for the full cost of the pension until the employee retires or dies.
Let's imagine that a worker aged 25, entitled to a pension of €2,000, is ultimately granted 150% of the regulatory base due to being recognised as suffering from gran invalidez (severe disability), which prevents them from undertaking any other employment and also from carrying out the most essential day-to-day tasks. The calculation would be as follows:
If the regulatory base results in €2,000 as the full pension for permanent absolute disability:
€2,000 x 150% = €3,000 per month
This amounts to:
€3,000 x 14 payments = €42,000 per year
The capitalisation of pensions (a lump-sum redemption of the present value of the future pension) is calculated by applying actuarial tables approved by the Ministry of Economy and the Directorate-General for Insurance and Pension Funds (Resolution of 2019).
These tables take into account:
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The age of the pensioner.
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The life expectancy associated with that age.
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A technical interest rate used to discount future income to present value.
In the case of a 25-year-old beneficiary, life expectancy exceeds 50 years according to mortality tables. This means that the capitalisation factor is very high.
According to the capitalisation tables for lifetime pensions (age 25, technical interest rate of 1.5%), the actuarial coefficient is approximately between 25 and 30 times the annual income (depending on whether adjustments for revaluation, survival, etc., are taken into account).
Applying a prudent range:
€42,000 x 25 = €1,050,000
€42,000 x 30 = €1,260,000
The approximate capitalisation of the severe disability pension for a 25-year-old worker with a base pension of €2,000 would therefore be between €1,050,000 and €1,260,000. The actual calculation is determined by administrative resolution applying the official tables strictly, and the final figure may vary depending on whether a different technical interest rate is applied or adjustments for revaluations are introduced. However, the figures provided here are a fairly accurate indication of the real risk involved.
What penalties could the company face?
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Claims in Spain: a worker abroad can sue the Spanish company before the labour courts in Barcelona.
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Social Security contributions: if the relationship is reclassified as employment, the company must comply with Spanish Social Security obligations.
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Compensation: in case of accidents or dismissal, workers can claim the same rights as employees based in Spain. Jurisprudence:
Article 40. Amount of penalties.
1. Infractions in matters of labour relations and employment, in matters of Social Security, without prejudice to the provisions of paragraph 3 below, in matters of migratory movements and work of foreigners, in matters of temporary employment agencies and user companies, except those referring to matters of prevention of occupational risks, which will be framed in paragraph 2 of this article, as well as the infractions for obstruction will be sanctioned as follows:
(a) Minor infringements, in their minimum degree, with fines of 70 to 150 euros; in their medium degree, from 151 to 370 euros; and in their maximum degree, from 371 to 750 euros.
b) Serious infringements with a fine, in its minimum degree, from 751 to 1,500 euros, in its medium degree from 1,501 to 3,750 euros; and in its maximum degree from 3,751 to 7,500 euros.
c) Very serious infringements with a fine, in its minimum degree, from 7,501 to 30,000 euros; in its medium degree from 30,001 to 120,005 euros; and in its maximum degree from 120,006 euros to 225,018 euros.
Are there any solutions?
Yes. Not every freelance contract with international elements is unlawful. There may be intermediate arrangements or business strategies that are perfectly valid and help minimise risks. However, each situation must be assessed individually, as what appears to be a commercial contract may in reality be deemed an employment relationship under the law.
Contact Conesa Legal: we are specialists in employment law, and through our international network, Aliant, we advise companies hiring abroad to ensure their business model is both lawful and secure.
