Reduced Hours: €1.3B Cost for Public Contract Firms
- A proposed reduction of the maximum working day in Spain to 37.5 hours could lead to a €1.3 billion increase in labor costs for companies holding contracts with...
- Sectors such as maintenance, cleaning, and community dining are especially vulnerable.
- The Economic and Social Council (CES) previously highlighted this issue, urging the government to consider the situation of companies with public contracts.
A shorter work week in Spain could hit public contract firms hard. new analysis suggests the proposed 37.5-hour work week might add €1.3 billion in labor costs, disproportionately impacting small and medium enterprises (SMEs) wiht public contracts. Sectors providing essential services like maintenance and cleaning face the most significant financial strain. The government is under pressure to address the issue, with industry leaders advocating for exemptions or compensation mechanisms to offset the increased expenses. Javier Sigüenza from Alliances warns of potential part-time contract proliferation in response to these changes. All eyes are on a potential modification to the Public Sector Contracts law. News Directory 3 keeps you in the know. Discover what’s next regarding potential government intervention for public contract firms.
Spain’s Work Week Reduction May Add €1.3B in Costs to Public Contracts
Updated May 29,2025
A proposed reduction of the maximum working day in Spain to 37.5 hours could lead to a €1.3 billion increase in labor costs for companies holding contracts with public administrations.The potential financial strain on small and medium enterprises (SMEs) is raising concerns, particularly those providing labor-intensive services to municipalities.
Sectors such as maintenance, cleaning, and community dining are especially vulnerable. These companies, already grappling with repeated increases in the minimum interprofessional salary (SMI), argue that the additional costs are “unassumable.”
The Economic and Social Council (CES) previously highlighted this issue, urging the government to consider the situation of companies with public contracts. While the Ministry of Labor initially expressed willingness to address pricing reviews for legally mandated labor cost increases, the final proposal lacked specific provisions due to stalled negotiations.
Javier Sigüenza, Secretary General of Alliances, a platform representing over 10 sectors providing services to the Management, estimates labor costs could rise by more than 4%, totaling between €1.27 billion and €1.35 billion.
Sigüenza is advocating for either an exemption for current contracts or a mechanism to compensate companies for the increased expenses. He also warned that the changes could lead to a proliferation of part-time contracts as companies struggle to meet service hour requirements without additional staff.
A proposal to modify the Law of Public Sector Contracts, allowing companies to transfer unforeseen labor cost increases, is currently under consideration. Though, parliamentary sources indicate it is indeed not a short-term priority for the government.
What’s next
The sector awaits further action from political groups, hoping for specific measures to mitigate the impact of the work week reduction on existing public contracts. Options being discussed include adapting the law for SMEs, extending the adaptation period, or providing direct aid.