Ministers in Spain agree to reduce the legal workweek to 37.5 hours

Despite resistance from employers’ groups, Spanish ministers decided on Tuesday to reduce the legal working week to 37.5 hours without affecting salaries. This is one of the coalition government’s main initiatives.

Labor Minister Yolanda Diaz, the leader of the hard-left party Sumar, wrote an executive order proposing the decrease from the existing 40 hours, which the cabinet accepted during its weekly meeting.

“This proposal is about living better, working less and being much more productive and more efficient economically,” Diaz stated to reporters.

In parliament, where the center-left administration of Socialist Prime Minister Pedro Sanchez lacks a clear majority and must balance the demands of many smaller parties to enact legislation, the bill still has to be passed.

The promise to cut working hours by the end of 2025 was a key component of Diaz’s party’s support for Sanchez’s leadership. Diaz is also the deputy prime minister.

However, the biggest employer group, CEOE, has stated that the idea will increase the prices of Spanish enterprises and reduce their competitiveness, and the center-right Catalan separatist party Junts has already shown opposition to it.

Negotiations with CEOE ended in November following months of discussions between Diaz, unions, and employers’ representatives. This was because CEOE claimed that the shortened week should be implemented through collective bargaining to accommodate the requirements of each enterprise, rather than by legislation.

“The corporate world is in favor of dialogue, but not in favor of monologue,” Antonio Garamendi, the CEO Executive, stated on Tuesday.

Diaz also criticized Economy Minister Carlos Cuerpo for “siding with employers” when he suggested postponing the move for a year to allow small firms to adjust.

Both the previous economics minister and Spain’s central bank have issued warnings that rising labor expenses may exacerbate inflation and impede the development of new jobs.

Following the cabinet vote, Cuerpo stated that with Spain’s robust economic growth, falling inflation, and 16-year-low jobless rate, businesses may oppose the move.