Labor reform to promote stable, quality employment

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1. It strengthens job stability: more types of contracts must be in writing, temporary contracts for market circumstances are limited (maximum six months within twelve, extendable by collective agreement to eighteen), and it creates a temporary insertion contract for unemployed people performing works or services of general or social interest.
2. It regulates part-time contracts in more detail: they must be in writing with the agreed hours, overtime hours (horas complementarias) require an express written agreement and cannot exceed 15% of ordinary hours (up to 60% if the collective agreement allows), and the relief contract linked to partial retirement is adjusted.
3. It improves guarantees in subcontracting and company succession: the main employer must check that the contractor is up to date with Social Security payments, is jointly liable for wage debts for one year, and workers and their representatives must be informed about a change of ownership.
4. It sets the severance pay at the end of temporary contracts at the proportional part of eight days of salary per year of service, and contracts with a maximum term are extended or become permanent if the worker keeps providing services.
5. It creates the employment promotion program for 2001: rebates on the employer's Social Security contribution (from 20% to 100% depending on the group) for permanent contracts with unemployed people from disadvantaged groups, self-employed workers hiring their first employee, and companies hiring people at risk of social exclusion.
6. It keeps the contract to promote permanent hiring, with thirty-three days of salary per year of service in case of unfair dismissal, raises the employer's Social Security contribution by 36% for temporary contracts shorter than seven days, and expands leave for premature births or babies requiring hospitalization.

Who it affects

• Companies and non-profit entities that hire: They must follow new contract forms and limits, and can get rebates if they hire unemployed people from the listed groups.
• Temporary and part-time workers: They gain rights equal to permanent workers, severance pay when the contract ends, and guarantees on additional hours.
• Unemployed people, young people, people over 45, and people at risk of social exclusion: They can benefit from insertion contracts, the contract to promote permanent hiring, and the rebates for companies that hire them.
• Workers of subcontracted companies or companies changing ownership: They have the right to information about the main company or the change, and to keep their labor rights.
• Mothers and fathers of premature or hospitalized babies: They can be absent from work for one hour or reduce their working day by up to two hours, and count their leave from the hospital discharge date.

Words worth knowing

Horas complementarias (additional hours)

Extra hours the employer can ask a part-time worker to work, if agreed in writing, on top of the fixed hours in the contract.

Contrato de relevo (relief contract)

A contract the company signs with an unemployed person to cover the hours given up by a worker who takes partial retirement.

Sucesión de empresa (company succession)

A change of owner of a company or workplace; the new employer takes on the labor rights and obligations toward the workers.

Cuota empresarial a la Seguridad Social (employer's Social Security contribution)

Money the company pays to Social Security for each worker; a bonificación is a reduction of that payment.

Fijo-discontinuo (permanent seasonal worker)

A worker with a permanent contract who only works at certain times of the year, when the company calls them in.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries