Why might the Labor Inspectorate visit you? What penalties can labor inspections impose?

A year has just begun in which self-employed workers will face a number of new developments in the tax, Social Security, and pensions areas and, of course, in labor matters. At the very start of 2022, the labor reform came into force, bringing major changes to the types of employment contracts and hiring requirements, to which self-employed workers will have to adapt from March. Once this transitional period has ended, as of March 30, 2021, neither project- or service-specific contracts (contratos por obra o servicio) nor casual contracts (contratos eventuales) will exist any longer.

These are the most common infringements that the Labor Inspectorate (Inspección de Trabajo) will pursue and to which you should pay very close attention:

Temporary layoff schemes (ERTEs) will remain one of the main reasons for inspections

Self-employed workers are required to notify the Public State Employment Service (SEPE) of the workers in their business who are under an ERTE. In addition, while they have workers under an ERTE, they may not hire new employees.

When a worker under an ERTE returns to the company, that worker may not be dismissed during the 6 months following his or her return. It is also prohibited for workers to work overtime while any of their colleagues remain under an ERTE.

ERTEs may be implemented because there is a drop in the business’s output; for that reason, other workers cannot be asked to work overtime as if activity were continuing as normal.

Another situation that the Labor Inspectorate commonly finds in companies is a failure to report a worker’s return to his or her duties. Companies bring their employees back but do not notify the SEPE; as a result, by enjoying benefits to which they are not entitled, they would be committing a serious infringement.

Abuse of temporary contracts and failure to comply with the changes in labor regulations

With the approval of the new labor reform, the number of professionals who may be hired under this type of contract has been reduced. Self-employed workers are required to state the reason for the contract in order to substantiate that it relates to a one-off circumstance.

In addition, it is very important not to exceed the maximum of 90 days that has been introduced as the maximum time limit for this type of contract in foreseeable situations, or the 3 months in the case of unforeseeable situations.

As of March 2022, temporary contracts will have to be converted into permanent contracts; in other words, project- or service-specific contracts will disappear. Temporary workers may only be hired for exceptional, unforeseeable, and emergency production reasons.

If temporary contracts are used fraudulently, self-employed workers could face fines of up to €10,000 per employee.

Failure to observe rest periods and non-payment of wages

We also come across non-payment of wages and working days longer than the hours permitted by law. These two grounds have been the most frequent among complaints filed against companies, usually by workers.

It is essential that all companies respect their employees’ rest time. Workers on a continuous working day must be given a break of around 30 minutes halfway through it so that they can perform their duties optimally.

Furthermore, some companies are late in paying their employees. This also results in penalties for the company, since employees must receive their pay at the stipulated intervals.

And, of course, working days may not exceed the hours permitted by law.

Infringements for failing to comply with prevention measures

Workers must be able to perform their activities safely and without any kind of risk. Companies are therefore required to provide them with the materials they need to carry out their duties while avoiding accidents.

In addition, failures to comply with regulations directly related to COVID-19 and with the measures to stop infections have been the most frequent grounds for complaints.

Breaches of the right to digital disconnection and of remote working hours

As provided in Law 10/2021, of July 9, on remote work, all workers have the right to digital disconnection. Once their working day has ended, they may not receive requests from their superiors, who will have to wait until the start of the workers’ working day to contact them.

Penalties will be imposed on all employers who make constant calls or send constant messages and emails outside working hours. It is also prohibited to contact employees who are on reduced working hours for maternity or paternity reasons.

Not having an Equality Plan

Having an Equality Plan (Plan de Igualdad) has been a mandatory requirement for all companies with a workforce of 150 or more employees since March 2020.

As of March 2022, companies with between 50 and 100 workers will also be subject to this obligation.

Amount of penalties for labor infringements

Law 10/2021 increased the labor penalties under the Law on Infringements and Penalties in the Social Order (LISOS), setting minor infringements at between €70 and €750.

Serious infringements could carry fines of between €751 and €7,500.

And very serious infringements would be set between €7,501 and €225,018.

For their part, fines for failing to have occupational risk prevention measures in place could range between €45 and €983,736.