Social Security classification of lawyers

Case law has addressed on numerous occasions the question of whether services provided by lawyers are of an employment nature. Based on logical criteria, a distinction has been drawn between cases where the practice of law is considered a professional services arrangement that does not constitute an employment contract, and those relationships in which lawyers provide their services in a subordinate capacity to a law firm or a company.

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This distinction has been drawn on the basis of specific characteristics that demonstrate the lack of independence in the work of lawyers employed by firms and that meet the defining features of an employment relationship:

    · The lawyers use the firm's resources and infrastructure without paying any amount for their use.
    · Their place of work is the firm's office, where they hold meetings with clients.
    · The firm is responsible for billing clients, and the lawyer receives a fixed, non-variable payment regardless of the total value of the services provided, which may be understood as a salary.
    · They are subject to set working hours and are entitled to a paid holiday schedule.
    · They have no freedom to choose their clients and no autonomy in organising their own work.

in accordance with the forms provided for under the current General Statute of the Legal Profession, it is clear that there are various legal structures through which the profession may be practised: individually, collectively, or through a corporate entity. This is what has given rise to the need for special employment legislation for this professional group.

Law 22/2005 of 18 November governs the special employment relationship of lawyers providing services at law firms, whether individual or collective. This law delegates the detailed regulation of this special employment relationship to a Royal Decree, to be issued within a maximum period of twelve months.

The consequences of this special regime in terms of Social Security include the obligation, as of 1 February 2006, for all lawyers covered by this special employment relationship to be registered under the General Social Security Scheme.

The following are excluded from the scope of the employment relationship established under this provision and are therefore not required to be affiliated to the Social Security Scheme, but may instead benefit from an alternative arrangement (mutual insurance fund, professional mutual society, or Special Scheme for Self-Employed Workers):
    · Lawyers who practise on a self-employed basis, whether individually or in association with others.
    · Arrangements concluded between lawyers where each maintains the independence of their respective practice.

The Resolution of 21 November 2005, issued by the Directorate-General for Social Security Regulation, sets out instructions for compliance with Law 22/2005 as regards Social Security coverage for lawyers employed under a special employment arrangement. The key provisions are as follows:

    · The obligation to register with Social Security takes effect on 1 February 2006, and registration must therefore be completed before that date.
    · Law firms that are not already registered as employers for Social Security purposes, i.e. those that do not have a Social Security employer registration number, must first register as an employer-employer.
    · Registering a lawyer requires following the procedures set out in the applicable legislation (the Affiliation and Registration Regulations and the Contributions Regulations).
    · Lawyers will be classified under Group or Rate 1 of the General Social Security Scheme. The level of contributions will be determined by the remuneration received by the lawyer.
    · No Social Security contributions falling due before 1 February 2006 will be enforceable. Where a lawyer who had previously been contributing under the Special Scheme for Self-Employed Workers (RETA) is brought into the General Scheme, those prior contributions will count towards benefits and pensions under the General Scheme. This does not apply, however, to contributions paid to a Mutualidad or Mutua (professional mutual fund): these will have no effect for the purposes of generating future benefits or pensions under the Social Security system.

Given that this legislation is relatively new and may give rise to uncertainty, please do not hesitate to contact our firm for any clarification or further information beyond what is set out in this article.