Companies will be legally commanded to record work hours and overtime digitally. Photo credit: Freepik
Spain’s government has announced a reform to the national work‑hour registration system. Under draft rules issued by the Ministry of Labour, companies will be required to digitally log start and finish times, breaks, and overtime for each employee.
Each extra hour must indicate whether it will be paid or compensated with rest days, ensuring clear records and enhanced transparency. The measure aims to standardise time-tracking, protect workers’ rights, and reduce disputes between employees and employers. The reform applies across all sectors and company sizes.
Businesses are expected to update or adopt digital systems capable of capturing working hours in real-time. Transitional periods have been proposed to allow companies time to adapt before full enforcement. While the draft decree has been published for public consultation, final implementation details and exact dates are yet to be confirmed.
Digital Logging and Tracked Overtime
How the Mechanics Work According to the Draft Decree
The draft decree requires companies to maintain precise digital records of employees’ working hours. This includes start and finish times, pauses, overtime, and whether the work is performed on-site or remotely. For each extra hour, the record must indicate if the compensation will be monetary or through time-off, providing clarity for employees and auditors.
Labour inspectors will have access to these digital records to monitor compliance. This aims to prevent informal or unpaid overtime, giving workers confidence that hours worked are formally acknowledged and compensated according to legal standards. Experts note that accurate digital tracking could also improve payroll accuracy, scheduling, and internal management of employee hours.
Impacts for Workers and Employers
Opportunities and Challenges
Employees benefit from greater transparency regarding their working hours and the mode of overtime compensation. The measure clarifies whether additional work is remunerated financially or through rest, allowing employees to plan their time and understand their rights.
Employers face operational challenges, including investing in compatible time-tracking software, ensuring accurate recording of multiple shifts, and managing remote work schedules. Transitioning to digital systems will require staff training, data security measures, and consistent record-keeping practices. Failure to comply could result in fines once the decree is formally enacted.
Broader Implications
Strengthening Spain’s Labour Oversight
The reform forms part of a wider strategy to modernise Spain’s labour framework and align with European employment directives. By standardising digital tracking and explicitly recording overtime compensation, authorities aim to reduce informal work practices and increase fairness in the workplace.
The draft decree is under consultation, meaning details such as final enforcement timelines and specific definitions of compensatory rest are still being finalised. Labour unions have emphasised that implementation should guarantee proper monitoring and enforcement to ensure that employee protections are upheld.
Highlights
- Companies must digitally record all work hours, including overtime and breaks.
- Each extra hour must indicate whether it is paid or compensated with rest days.
- Labour inspectors will have access to digital records to ensure compliance.
- The reform is currently under consultation; exact enforcement dates are pending.
Once enacted, this reform is expected to improve work-life balance, increase transparency, and reduce conflicts over overtime pay. Employees will benefit from clearer records, and employers gain guidance for compliance with labour standards. The reform reflects Spain’s ongoing efforts to modernise labour legislation while protecting workers’ rights and ensuring accurate reporting across all workplaces.
