The most common penalties in labour inspections in Spain

When a company is subject to a labour inspection, inspectors may detect various infringements that can result in financial penalties or even the temporary closure of the business. It is important to be aware of the most common penalties and how to avoid them.

1. Failure to register with Social Security

One of the most serious and frequent errors is not registering employees with Social Security. This offence carries penalties ranging from 3,750 to 12,000 for each unregistered employee. In addition, the company must pay the outstanding contributions with surcharges and interest.

How can this be avoided?
Ensure that every new employee is registered before their first day of work.
Keep strict control of contracts and employment documentation.

2. Failure to comply with the minimum wage and delays in paying salaries

Inspections usually verify that employees receive at least the Minimum Interprofessional Salary (SMI) and that payments are made on time and in the correct manner. Failure to comply with these obligations results in fines ranging from 626 to 6,250 depending on the severity and recurrence.

How to avoid it?
Review changes to the SMI annually.
Establish internal mechanisms to ensure the timely payment of salaries.

3. Excessive working hours and unpaid overtime

The Workers’ Statute establishes a limit of 80 hours of overtime per year, except in exceptional circumstances. Failure to pay or properly record these hours can result in penalties ranging from 626 to 6,250.

How to avoid it?

Implement a time recording system that reflects the hours worked.
Avoid overloading employees with excessive working hours.

4. Lack of occupational risk prevention

Failure to comply with occupational health and safety regulations is a serious offence. The fine varies between 2,046 and 819,780, depending on the danger and consequences of the breach.

How can this be avoided?

Carry out regular risk assessments.
Provide risk prevention training to employees.

5. Fraudulent contracts

The misuse of temporary contracts for permanent positions is one of the most heavily penalised practices. The company may face fines of between €1,000 and €10,000 per contract if abuse of temporary contracts is detected.

How can this be avoided?

Review each contract with an expert in labour law.
Ensure that the temporary contract meets a real and justified need.

6. Employment discrimination

Discriminatory practices based on gender, age, origin or any other reason can result in penalties of up to 225,018, in addition to possible claims for damages.

How to avoid it?

Ensure equal conditions in job offers and internal promotions.
Have protocols in place to prevent harassment and discrimination.

7. Lack of mandatory documents

Inspections also review employment documentation, including contracts, payslips, time records and prevention protocols. The absence of these documents can result in fines ranging from 60 to 6,250.

How to avoid it?

Keep organised files with all the required documents.
Digitise and back up important documentation.

How are penalties for labour inspections notified?

When a company is subject to a labour inspection and irregularities are detected, the penalty is officially notified through an administrative procedure. First, the Labour Inspectorate issues a statement of infringement, detailing the breaches detected and the applicable regulations.

This report is notified to the employer by registered mail, electronic notification via the electronic office or, in some cases, hand delivery if the inspector deems it necessary. Upon receipt of the notification, the company has a period of time to submit arguments or provide additional documentation that may justify its situation.

If the arguments are insufficient or not submitted, the penalty is formalised by means of an administrative decision, which may include a financial fine and, in serious cases, the obligation to regularise the employment situation detected.

How are penalties for labour inspections notified?

This report is notified to the employer by registered post, electronic notification via the electronic office or, in some cases, by hand delivery if the inspector deems it necessary. Upon receipt of the notification, the company has a period of time to submit arguments or provide additional documentation that may justify its situation.

How to manage a penalty imposed by a labour inspection?

When faced with a labour inspection penalty, the first step is to carefully review the infringement report to verify the legal basis for the penalty and whether there are any errors or questionable interpretations. It is advisable to consult a lawyer or advisor specialising in labour law.

If the company considers the penalty to be unfair or disproportionate, it may submit arguments within the established time frame. It is essential to provide evidence, contracts or documents to justify your decision.

If the Administration upholds the penalty, it can still be appealed through an administrative appeal or through the courts by means of a contentious-administrative appeal. At the same time, it is advisable to correct the irregularities identified to avoid future penalties.

Orihuela Costa Legal Advice: Your solution for labour inspections

At Asesoría Orihuela Costa, we know how worrying a labour inspection can be for any business. Our team of experts in labour law and social security will help you comply with all regulations to avoid penalties and ensure the smooth running of your company.