Developments in the GSB 2018 Labour section

Law 6/2018, dated 3 July, concerning the General State Budget (GSB) for 2018, published in the Official State Gazette (BOE in Spanish) on 4 July and in force from 5 July, includes new provisions on Labour and Social Security matters affecting employers, employees and pensioners.

Pensions

Pensions are increased by 0.25% in general, retroactively from 1 January 2018, although an additional 1.35% increase is established for contributory pensions (however, the additional increase will be 2.75% in the minimum amounts of both contributory and non-contributory pensions).

The amount of the revaluation of public pensions may not exceed a total annual value of 36,121.82 Euros, while the maximum public pension is set at 2,580.13 Euros per month.

Widow’s and widower’s pensions will enjoy a four-point increase on the regulatory base, from 52% to 56%, for people over 65, from the first day of the month following the coming into force of this law. This increase will reach 60% on 1 January 2019.

Pensioners in the contributory system who do not receive income from work, capital or economic activities and capital gains in 2018, or who receive therefrom less than 7,151.80 Euros per year, will be entitled to receive the necessary supplements to reach the minimum pension amount.

The amount of the retirement and disability pensions from the Social Security system is fixed at 5,178.60 Euros per year in the non-contributory mode. The Compulsory Old Age and Disability System (SOVI in Spanish) is set at 5,728.80 Euros per year when it is not complemented by other pensions, and 5,560.80 Euros per year when it is.

Paternity: extension of paternity leave to 5 weeks

Paternity leave is set at 5 weeks, which may be extended in the case of childbirth, adoption, placement for multiple adoption or foster care purposes, by a further two days for each child from the second one.

It is envisaged that the suspension of the contract may be enjoyed on a full-time or part-time basis for a minimum of 50%.

Earnings subject to contribution

Effective from 1 August, the maximum earnings subject to contribution is set at 3,803.70 Euros per month.

Self-employed persons

The minimum earnings for contribution are increased to 932.70 Euros per month.

The coming into force of what is set forth in the Statute of self-employed persons concerning the possibility for self-employed persons to pursue their business on a part-time basis and the establishment of a system of part-time contributions for such persons is postponed.

Self-employed workers who reside and carry out their business activity in a municipality whose municipal register, as of the date of the start of the business, has less than 5,000 inhabitants, and who have completed the initial 12-month period of application for reductions in the amounts for common contingencies, including temporary incapacity, established generically, will receive bonuses for the 12 months following the initial period contemplated.

Special System for Household Employees

The earnings subject to contribution for common and professional contingencies for 2018 are determined by updating the monthly remuneration and base for contribution from the scale in force in 2017, by the same proportion as the increase in the minimum professional salary.

The common contingency contribution rate to be applied in 2018 is 27.40%, of which 22.85% shall be paid by the employer and 4.55% by the employee.

The applicable rates for contributions for accidents at work and occupational illness remain unchanged in comparison to 2017.

Bonuses and reductions in the hiring of employees

A bonus of 250 Euros per month (3,000 Euros per year) is established for company contributions for common Social Security contingencies, for the conversion to full-time indefinite contracts of training and apprenticeship concluded with young people who are beneficiaries of the accompanying financial aid for young people registered in the National Youth Guarantee System.

Additionally, financial aid of € 426 is fixed for young people registered in the National Youth Guarantee System who sign a contract for training and apprenticeship in order to obtain a professional certificate. This assistance will be maintained for the duration of the contract, with a maximum duration of 18 months, or 36 months for people with a degree of disability equal to or greater than 33%.

The following discounts are maintained

A 50% reduction in the company contribution for common contingencies in the event of a change in the work position due to risk during pregnancy or breastfeeding, and in the event of occupational illness.

A 50% discount in the company’s social security contributions for contingencies common to companies in the tourism, trade and hotel and catering sectors that generate productive activity in February, March and November of each year and that hire and/or maintain the employment of workers with temporary fixed-term contracts during those months.