Spain Tests Reduced Work Hours Amid Lowest Unemployment in 15 Years

MADRID – In March, Spain launched a pilot project worth 10 million euros ($10.63 million) to assist small and medium-sized industrial companies in reducing the workweek by at least half a day, aiming to enhance productivity without cutting salaries. 

To qualify, companies must propose productivity improvements that offset any increased wage costs. These adjustments should be implemented within a year and sustained for a minimum of two years. 

In the project’s first year, the government will subsidize wage costs for companies reducing work hours and provide support for training and productivity measures. Participation is limited to full-time permanent contract workers and ensures female representation in alignment with their presence in a company’s workforce.

Companies with up to 20 employees must have at least 30% of their workforce reduce hours, while those with 21 to 249 employees must have at least 25% participation in the plan.

In October, Spain considered a potential decrease in the workweek from 40 to 37.5 hours. Yet, enacting this reduction necessitates broader political backing. This initiative coincides with Spain experiencing its lowest unemployment rate in 15 years, reaching 11.6% in the second quarter and its minimum wage rising by approximately 47% since 2018.