(a) The social debate surrounding the work of delivery persons and the various related court decisions in Spain (declaring that these delivery persons are, actually, employees), led to the enactment of Royal Decree Law 9/2021 and, subsequently, Law 12/2021, which amends the Labor Act so that product delivery or distribution work carried out within the framework of digital platforms is now treated as employment.

(b) No.

(c) No.

(a) No.

(b) No.

(c) No.

The EU directive on platform workers, which was adopted by the EU Parliament in early 2024, seeks to improve the working conditions of individuals performing work for a digital labor platform. Broadly, the directive provides that an individual working for a digital labor platform will be presumed to be its employee where facts indicating control and direction are present. For more information, please see our client alert here.

The main employment law risk is misclassification.

Reclassified contingent workers would be entitled to all ordinary employment rights (including severance rights), and they could claim overdue salary amounts and benefits, subject to a one-year statute of limitations.

In addition, labor authorities could impose the following sanctions on the company:

1. Administrative fine ranging between EUR 3,751 and EUR 12,000 per reclassified contingent worker for failure to register them before social security system.
2. Disqualification from contracting with the public administration and other accessory sanctions, such as the loss of, or prohibition from accessing, specific public benefits and discounts on contributions related to employment and training programs

The company would also need to consider right-to-work implications if an individual (non-EU foreign national) is reclassified as an employee.

There is a risk of misclassification, which could lead to liability for not withholding wage tax and social security contributions. This risk must be analyzed on a case-by-case basis because the circumstances may be different.

The request of a self-employed contractor to be recognized as an employee before the labor courts or by the Inspectorate of Work may start a procedure leading to penalties for wrongly classifying someone as self-employed.

Administrative sanctions would be imposed on the company ranging between 100% and 150% (depending on the economic loss caused to the Spanish tax authorities) of the amount of contributions not not withheld on account of personal income tax in the previous four years.

The main social security risk is misclassification.

The company could face the following administrative sanctions:

1. The payment of the contributions not paid in the previous four years, plus a 20% surcharge for late payment and interest
2. An administrative fine of between 100% and 150% of the value of contributions not paid in the previous four years for failure to duly pay contributions to the Social Security General Treasury
3. Liability for any damages caused by failing to properly contribute in the past, and for the lack of proper social security coverage (e.g., damages and surcharges for accidents and damages to future pensions) (The sanctions (which can include those in (i) and (ii) above) are case specific and will depend on the applicable statute of limitations.)

There is a misclassification risk. If individuals are reclassified from self-employed workers to employees, the company is at high risk of being subject to a number of duties in relation to enrollment in the social security general regime (broadly, such regime allows employees to have a higher pension than the social security regime for self-employed workers). One must consider the fact that the amount of pension received by an employee depends on the contributions their employers have made in their name. Therefore, and as mentioned, when reclassified as an employee, the company must pay the contributions of at least the previous four years to social security system. The company could also be liable for any damages caused by failing to properly contribute in the past and for the lack of proper social security coverage (e.g., damages and surcharges for accidents, and damages to future pensions). The employee will always be entitled to request the amount of the retirement contributions for social security. This right has no statute of limitations, and the longer the fake commercial relationship with the company exists, the higher the amount will be.

The company could be liable for any damages caused by failing to properly contribute in the past, and for the lack of proper social security coverage (e.g., damages and surcharges for accidents and damages to future pensions). Social security will consider the years of employment with this company when calculating the employee's future pension. The employee will always be entitled to request the amount of their retirement contributions for social security. This right has no statute of limitations, and the longer the fake commercial relationship with the company exists, the higher the amount will be.

Yes, the company could be liable for a corporate criminal offense if employees facilitate the tax evasion of contingent workers and the company omits tax revenues and fails to pay corresponding taxes that exceed EUR 120,000 per year.

In addition, Law 14/2022, released on 22 December 2022, has added a new criminal offense against employees' rights, which is the establishment of illegal employee conditions by means of employment circumstances different from the employment contract, or maintaining the same against an administrative injunction or sanction.

The company could be liable for a criminal offense if it omits tax revenues and fails to pay corresponding taxes that exceed EUR 120,000 per year and if the employees facilitate the tax evasion of contingent workers. The criminal offense may result in imprisonment between one to five years and a monetary penalty of between 100% and 600% of the underpaid tax. An aggravated criminal tax offense would exist when the undeclared tax due exceeds EUR 600,000 per year, or when the criminal offense involves fiduciary instruments that seek to hide the identity of the taxpayer or criminal organization. An aggravated criminal offense may result in imprisonment between two to six years and a monetary penalty of between 200% and 600% of the underpaid tax.

In addition, the administrators of the company or the managers in charge of the service could be liable for a criminal offense involving the employees' rights if the company established illegal terms and conditions for the employees by means of employment circumstances different from the employment contract, or maintained the same against an administrative injunction or sanction. This could be punishable by imprisonment between six months to six years, and a criminal fine of six to 12 months (with aggravation, i.e., violence or intimidation, a six- to nine-year prison sentence and a criminal fine of 12 to 18 months). For this purpose, the imposable fine is calculated by multiplying the number of days of the sentence by the amount of the daily fine imposed, which, for individuals, can be from a minimum of EUR 2 to a maximum of EUR 400.

This is a combined risk rating across all areas, including likelihood of challenge, impact of challenge and uncertainty of law.