Spain: Measures to improve the compatibility of retirement pensions with work, the extension of partial retirement in the manufacturing industry and other labor and social security innovations are approved

Royal Decree-Law 11/2024

Royal Decree-Law 11/2024, of December 23, for the improvement of the compatibility of the retirement pension with work includes several regulatory amendments, among which the following stand out:

• Modifications are introduced in the case of partial retirement without having reached the ordinary retirement age with a relief contract:
  
  • The age must be lower by a maximum of three years than the age applicable in each case according to article 205.1.a) of the General Social Security Law (LGSS) and a contribution period of thirty-three years must be accredited as a general rule. The reduction will be between 25% and 75% of the working day.
  • In cases where access to partial retirement is anticipated by more than two years with respect to the ordinary age, the reduction in working hours during the first year will be set at between 20% and 33%. In these cases, from the second year onwards, the parties may alter the reduction of the working day.
  • Relief contracts will be of an indefinite-term, full-time nature and must be maintained for at least two years after the partial retirement is terminated. In the event that the relief contract is terminated before the partial retiree reaches full retirement, the employer will be obliged to enter into a new contract under the same terms as the terminated contract.
• Modifications to the transitional regime for partial retirement in the manufacturing industry (section six of the fourth transitional provision of the LGSS), which is extended until December 31, 2029:
  
  • The regulation of partial retirement with simultaneous celebration of a relief contract, in force prior to the entry into force of Law 27/2011, will continue to apply to pensions caused before January 1, 2030 that have the requirements of the rule.
  • The requirement of the percentage of workers with indefinite-term contracts must exceed 75% of the total workforce.
  • During the period of partial retirement, the company and the employee will contribute 80% of the contribution base that would have corresponded to the partial retiree at full time. This contribution will be applied gradually year by year, starting at 40% in 2025 and ending at 80% in 2029.
• When the worker takes partial retirement once he/she has reached the ordinary retirement age, a relief contract may be entered into, whose working day will be at least the working day left vacant by the partial retiree, which may be for an indefinite period or for a fixed term. In the latter case, its duration will be coincident with the time during which the partial retirement is maintained and, in any case, with a minimum of one year. The relief contract will be celebrated with an unemployed worker or with a worker who has a fixed-term contract with the company.
• The effective compatibility between work and pension will allow the accumulation of working time in periods of days in a week, weeks in a month, months in a year or other periods of time, in accordance with the provisions of individual agreements or, as the case may be, collective bargaining, in all its expressions, including the work center agreement, without being able to limit or prevent its use in any area.
• Relief contracts entered into prior to the entry into force of the regulation will continue to be governed by the regulations in force at the time they were entered into.
• Likewise, regulatory modifications are introduced to encourage retirement at a higher age than the ordinary retirement age and to facilitate the so-called active retirement.

The regulation came into force on the day following its publication, December 25, 2024, although its content, with some exceptions (including the provisions for partial retirement in the manufacturing industry), will come into force on April 1, 2025.

Royal Decree-Law 9/2024

On the other hand, Royal Decree-Law 9/2024, of December 23, which adopts urgent measures in economic, tax, transport and Social Security matters, and extends certain measures to face situations of social vulnerability, includes other labor and Social Security measures, among which we highlight the following:

• The current minimum interprofessional wage is extended until the approval of the new minimum interprofessional wage for 2025.
• As from January 1, 2025, the minimum contribution bases will be increased by the same percentage as the minimum interprofessional wage increased by one sixth and the maximum bases will be set by applying the percentage foreseen for the revaluation of pensions to which the percentage established in the thirty-eighth transitory provision of the LGSS will be added.
• The contribution corresponding to the Intergenerational Equity Mechanism will be 0.80% (0.67% to be paid by the company and 0.13% by the employee).
• As from January 1, 2025, the additional solidarity contribution referred to in article 19 bis of the LGSS will be applied.
• It is established that the contribution exemptions regulated in the forty-fourth additional provision of the LGSS (contribution benefits applicable to temporary labor force adjustment plan and the RED Mechanism) will be conditioned to the maintenance in employment of those affected for a minimum of six months and a maximum of two years following the end of the temporary labor force adjustment plan period.
• In those companies benefiting from the direct aid provided for in the regulation, the increase in energy costs may not constitute an objective cause for dismissal until December 31, 2025. Failure to comply with this obligation will entail the reimbursement of the aid received. Likewise, companies that avail themselves of the measures for the reduction of working hours or suspension of contracts regulated in Article 47 of the Workers' Statute for reasons related to the invasion of Ukraine and that benefit from public support will not be able to use these causes to carry out dismissals.

This regulation came into force the day after its publication, that is, on December 25, 2024, notwithstanding the fact that, among other measures, the update of the contribution bases will produce economic effects as from January 1, 2025.