Wages, Payroll and Working Time Rules

Wages and Salary Regulations

Definition of wages

All economic perceptions of workers, in cash or in kind, for the provision of their labor services are considered wages. These include any economic receipts or benefits received as remuneration for professional work.

Salary classification

The salary is classified as one of the following:

• Per unit of time (e.g., hourly, daily, monthly).
• Work-unit (piece) (payment by piece or unit produced).
• Mixed (a combination of the two previous options).

Payment methods

Ways of payment: cash or in kind.

Wage structure elements

The wage structure has the following elements:

• Basic salary: fixed remuneration for units of time or units of work.
• Salary supplements: arise from specific circumstances and are added to the base salary. These include circumstances relating to the person (e.g., seniority and language skills), working conditions (e.g., shifts, hardship), and the quality or quantity of work (e.g., overtime). Supplements may be payable monthly or provided in kind (for example, residence).

Minimum wage (SMI)

The government sets each year a minimum wage (SMI), which is unseizable. The minimum wage can be improved by collective agreements or individual contracts.

Wage guarantees and FOGASA

Wages enjoy guarantees. The term "guarantee" means priority over other claims against the employer: there is an absolute preference for wages of the last 30 days of work and for objects produced by workers that are in the possession of the employer; for the remainder, wages have preference over other credits, excluding mortgages.

The Wage Guarantee Fund (FOGASA), an autonomous body under the Ministry of Labor and Immigration, collects wages and guaranteed severance in cases of termination, insolvency, or bankruptcy proceedings.

Payroll and documentation

Salaries must be settled and paid on time and the agreed date and place must be documented. The employer must issue the pay slip (payroll), which must necessarily include:

• Company and worker data.
• The settlement period.
• Earnings (accruals).
• Deductions (social security, income tax and other lawful deductions).
• Net amounts to be received.

Working day and rest periods

The working day is the period during which the worker must place their work at the disposal of the employer. Working time and rest periods for each calendar year are established in the employment contract or by applicable labor regulations.

It is also determined whether the working day is split or continuous, or if it is organized in shift patterns. Hours worked above the ordinary working day are overtime. The maximum ordinary overtime is 80 hours per year, not including overtime due to structural reasons or force majeure.

Night work

Work performed between 10:00 p.m. and 6:00 a.m. the following day is considered night work.

Paid leave and annual leave

Within the working day, employees are entitled to paid leave for predictable and justified reasons (for example, 15 days for marriage or one day for transfer of residence). Employees are also entitled to annual leave, which is not replaceable by economic compensation, of at least 30 calendar days for each year worked.