Spain’s Labor Reform: April Employment Trends and the Easter Hiring Surge

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Registration tasks and registration stability align in this context. April presented a set of statistics illustrating the impact of the full enforcement of new contract formulas as part of labor reform. One of two new contracts signed remains uncertain, continuing the pattern where about one in ten contracts are fixed. In a backdrop where inflation persists and the Ukraine war continues, Spain is seeing job growth, reaching a milestone of twenty million active workers. Never before have so many people worked in Spain at the same moment. Unemployment, meanwhile, posted a favorable month for the labor market with the largest drop in three years, bringing the unemployment count down to three million.

On April 1, new hiring conditions agreed between the Government, employers and unions under the labor reform took effect. The key changes to employment and service contracts included higher penalties for companies that misuse temporary contracts, accounting for a large share of Spain’s workforce, and a shift toward other contractual forms. Compared with last April, usage surged by 1,722 percent, resulting in a robust rise in permanent contracts that also touched younger workers. Among those under 25, 44 percent of contracted roles are still of uncertain nature.

The statistic that said one in every two contracts was uncertain has a statistical nuance because terms such as discontinuous contracts are technically indeterminate yet leave strong signals. The contract targets workers permanently tied to a company but who are engaged only for certain weeks or months during peak activity or seasonal missions. Of nearly 700,000 permanent contracts signed in April, 284,732 were full-time and 413,914 were part-time.

However, this does not mean that 1.7 million permanent contracts were recorded since the labor reform approval in January, which is about one million more than in the same period the previous year. Everything is changing in Spain today, remarked Yolanda Diaz during an event hosted by Europa Press on a recent Wednesday.

Easter effect drives employment

The labor market gained 184,577 employees in April versus March, a rise supported by Holy Week hiring. The increase in discontinuous fixed rates aligns with tourist activity, with hostel occupations contributing to the positive balance as 110,000 newly employed SGK affiliates joined. Transportation added 11,510 and Trade added 9,115, helping to sustain the level of 20.01 million active workers.

Self-employed workers continued their upward trend compared with March, adding 9,100 to reach 3.3 million RETA members.

If EPA data released last week indicate more hours worked in the Spanish economy overall than before the pandemic, social security figures released this Wednesday reinforce the trend. The number of workers in a stable situation rose by 17,000, significantly lower than the 100,000 seen in the last month of the pandemic, and well below the pandemic peak of 3.4 million in the early months of the crisis.

Unemployment remains at about three million

Unemployment fell by 86,260 people in April compared with March, bringing the total unemployed to three million. While the start of the Ukraine conflict raised concerns about a slower decline in unemployment, the month marked the largest drop since April 2019. Spain still ranks among countries with high unemployment rates globally and within the European Union, though the country has reduced unemployment by nearly one million people over the past year.

Examining the year-over-year changes reveals differences in progress between men and women, with men exiting unemployment faster than women. On an annual basis, male unemployment decreased by 25.1 percent, compared with a 21 percent drop for women, demonstrating a gender gap in the pace of improvement.

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