Training and employment incentives form part of the Spanish government’s job creation policy, and are currently delivering major savings in labor costs to the employers receiving them.
Since the approval of Royal Decree 395/2007, regulating the Vocational Training for Employment Subscheme, Vocational Training for Employment has combined both the training aimed at employed workers (Ongoing Vocational Training) and the training aimed at unemployed workers (Occupational Training) under a single model known as Vocational Training for Employment.
In this context, the Vocational Training for Employment subscheme encompasses a set of instruments and actions aimed at encouraging and extending to companies and to employed and unemployed workers a type of training that meets their needs and contributes to the development of knowledge based economy.
These programs include most notably the credit allocated to employers for demand-based vocational training, collected in the form of reductions in social security contributions and subdivided into two types: (i) credit for carrying out own training programs and (ii) credit for granting workers individual leaves of absence for training (additional to the preceding credit).
The creation of indefinite-term employment is also encouraged with the granting of aid to employers, consisting mainly of reductions in social security contributions, aimed at fostering the hiring of new employees on a stable or indefinite-term basis and, in certain cases, promoting the conversion of temporary jobs into indefinite-term jobs.
This catalog of aid, the basic parameters of which were just described above, is set forth in Law 43/2006, on improved growth and employment, in Law 3/2012, on urgent measures to reform the job market, and in Law 18/2014 of October 25, 2014 on urgent measures for growth, competitiveness and efficiency.
In particular, these provisions establish a scheme of aid for the following cases:
• Indefinite-term hiring to support entrepreneurs: in such cases, the employer will be entitled to (i) claim certain tax incentives in respect of the first employment contract arranged with a person under 30 years of age; and additionally, in case of hiring unemployed persons who receive contributory unemployment benefits; (ii) request reductions in the employer’s contribution to social security, for three years if the employees hired are between 16 and 30 years of age or over 45 years of age and registered with the Employment Office with increases in the amount of the reductions in the hiring of women in industries in which women are less represented).
• Incentives for indefinite-term hiring of workers in special situations (socially-excluded workers, victims of domestic or gender-based violence and victims of terrorism) and of persons with disabilities. Relief is also established for the conversion of work-experience, handover and replacement due to retirement contracts, as well as vocational training and apprenticeship contracts, into indefinite-term contracts.
• Favoring employability by modifying the vocational training and apprenticeship contracts and instrumenting measures to foster this type of contract, such as a reduction in the employer’s contribution for common contingencies, occupational accidents and illnesses, unemployment, wage guarantee fund and vocational training; or a reduction in the employer’s contribution to social security in case of vocational training and apprenticeship contracts are converted into indefinite-term contracts.
• Incentives for indefinite-term and temporary hiring and for conversion to indefinite-term contracts through special employment centers, consisting of 100% of the employer’s social security contributions, including contributions for occupational accidents and sickness and joint collection contributions, throughout the term of the contract.
• Incentives for the indefinite-term hiring of beneficiaries of the National Youth Guarantee System, consisting of an annual amount of between €900 and €1,800, depending on the working hours.
Incentives are also established in Law 11/2013 of July 26, 2013 on measurers to support entrepreneurs, stimulate growth and create employment, consisting of a reduction in employer social security contributions for nonoccupational contingencies and aimed mainly at promoting the part-time hiring, on a permanent or temporary basis, of unemployed young persons under 30 years of age with no work experience (link to training, microenterprises and self-employed workers, first job, work experience for first job, etc.) or of unemployed persons aged 45 or over who are registered with the employment office and are hired by self-employed workers under 30 years of age (new young enterprise projects).
In addition, the possibility has been introduced of reducing employer social security contributions, through an exemption of 500 euros per month for new contracts made until August 31, 2016, in the case of full-time contracts, provided that the requirements established for this incentive are met.
Lastly, other additional aid and subsidies (i.e. up to a maximum of €5,108 per indefinite-term job created) can be granted to investment projects aimed at generating economic activity and stable employment in local and regional areas of Spain, subject to classification by the State Employment Public Service as investment and employment (I+E) projects or entities. Such projects must be supported by local corporations through the related contribution of economic and/or material resources, although the State Employment Public Service, or the related Autonomous Community agency, must process the applications, select the projects and grant the aid.
Last updated: 18|05|2016