New labor hiring incentives: the most important changes effective September 1

On September 1, a series of measures to encourage the hiring of labor published in Royal Decree-Law 1/2023 came into force on January 11, 2023. These changes entail new obligations for companies since, among others, new requirements are introduced that must be met in order to benefit from these bonuses. 
The new incentive system aims to create stable employment and promote the incorporation of people with low employability to the labor market, with emphasis on indefinite-term contracts and vulnerable groups. The following is a summary of the most important aspects of this new system:
  • The incentives that were in force before the publication of Royal Decree-Law 1/2023 are maintained, but most of the bonuses that existed until then are repealed and those that remain are modified. 
  • The Social Security hiring bonuses become fixed amounts and are only valid for permanent contracts. 
  • New requirements for companies are detailed: not to have been disqualified from obtaining public subsidies and aid, to be up to date with tax and Social Security payments and to have an Equality Plan when this is mandatory.
  • The hired worker must be kept for at least one year or up to three years, as the case may be (there are some exceptions).
  • New exclusions: bonuses will not be applied to the hiring of family members up to the second degree (except for people with disabilities), or people who have been in the same company in the previous twelve months under an indefinite-term contract, or those who have terminated another employment contract in another company of their own free will during the last 3 months. In addition, those employers who have terminated or are terminated due to a recognized unfair or collective dismissal will be excluded for twelve months from the incentives. 
  • In the case of part-time contracts, the amounts will be reduced proportionally to the working day, so that it will not be less than 50% of the full-time working day.
  • A new system of reimbursement of the benefits obtained in the event of non-compliance is established: the amounts not paid must be returned with the corresponding surcharge and late payment interest, and those companies that go to countries that are not part of the European Union must return the bonuses received in the previous four years. 
For further information on the application of these incentives, please do not hesitate to contact our Labor Department:
933 030 060
972 940 940
972 505 100


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