As a business owner you may know from the get-go that you need staff or the situation may arise during the busy season when you are run off your feet and could do with an extra set of hands and if you’re particularly lucky, your business will have grown to a point where you have no choice but to contract staff. There are plenty of horror stories doing the rounds about the pitfalls of hiring outside help or assurances that it isn’t necessary to give “official” contracts, you can just pay in cash.



In order to hire employees you and your business will obviously have to be properly registered at Social Security and the Tax office. Since I am going to assume that you have already evaluated your situation and know 100% that you must hire, I’ll jump right into the thick of it and explain the different types of contracts available. Each type of contract has numerous characteristics but below you will find the basic terms:

Contracts for a specific time period or for a specific purpose and Part-time
Contracts for training and work experience purposes
Indefinite contracts
Work experience (de prácticas)

Objective: To help train professionals in line with their level of studies (university degree etc)

Duration: 6 months to 2 years, renewable twice for minimum 6 month period

Type: Part or full-time

Note: Must be a written contract. Special salary conditions apply. 50% reduction in social security costs for employers for hiring physically challenged people




Learning and training (para la formación y el aprendizaje)

Objective: New measure to train and provide opportunities for unemployed youths

Duration: Minimum 6 months and maximum of 3 years

Requirements: Generally for youths under 25 years of age

Salary: As per collective agreement

Note: Special reductions in social security costs for employers




Indefinite (Indefinido)

Characteristics: No limitation in duration

Duration: Indefinite

Type: Part or full-time

Compensation: Depends on cause of termination. To cancel, defaulting party must give the other at least 15 days notice.

Note: Can be verbal or written contract. Fraudulent temporary contracts can be automatically converted to indefinite.



There are collective agreements, ‘convenios’ based on the type of business activity, ie travel agencies and hoteliers. These collective agreements govern specifics laws regarding employee categories, salaries, holidays etc to protect employees from exploitation, illegal firings and the like.

Next time we can talk about how to hire, trial periods, new laws regarding compensation when you fire or have to let an employee go and rules about hiring family members.

About Sabrina L. Williams

Although I was born in the UK, I moved to the Canary Islands, Spain at a young age and I haven't looked back. The Canaries is a fantastic place to live, I mean you can do all types of outdoor activities practically all year round because of the great weather. Horses are my poison but the islands are also a superb spot for water sports so they do attract a lot of attention from people around the world. Anyway, enough about that. Back in 2011, I made one of the biggest, scariest yet best decisions I'd ever made and set-up my own business in the middle of a recession. I love what I do as no two days are the same, plus Spanish law keeps me on my toes as it is constantly changing (often without warning!) so there is always something new to learn. As I've branched out in the world of Administrative Consultancy, I decided to create a blog to discuss topics of interest to others in my industry and my clients, share tips and experiences, to see what new ideas people have for improving their businesses and the like so I hope you'll find the time to join me on this venture...

Leave a Comment