The reduction of working hours to 37.5 hours a week, whose draft bill was approved Tuesday by the Council of Ministers, could cause a 3% drop in turnover in the tourism and hospitality sector, equivalent to 5,099 million euros a year, according to the Spanish Confederation of Hotels and Tourist Accommodation(Cehat) and the Spanish Hotel Industry.
Both employers’ associations have warned that this measure “will especially penalize micro-enterprises”, which represent 94% of the companies in the sector, in addition to generating a direct wage impact of 2,538 million euros in more than 300,000 hotel and catering companies.
Economic impact: lower turnover and higher labor costs
According to data provided by employers’ associations, the hospitality industry is a sector based on presence, where productivity depends directly on the availability of workers. Therefore, the reduction of service and production time in establishments will directly affect income, since fewer customers will be served in the same amount of time.
In addition, the wage cost for the sector will increase by more than 2.5 billion euros, which is added to the recent increase in the minimum wage (SMI) and social contributions, generating a context of high economic pressure for companies.
According to Emilio Gallego, general secretary of the Spanish Hotel and Catering Industry, “this measure violates the proper functioning of social dialogue and collective bargaining agreements”, in addition to ignoring the productivity factor. Gallego warned that the negative effects could be significant for the national economy, in a sector that represents more than 13% of GDP.
For his part, Jorge Marichal, president of Cehat, pointed out that the hotel and tourism industry “requires a flexibility that has always been agreed with the unions”, due to the high seasonality of the sector.
A blow to microenterprises in the sector
Micro-enterprises, which make up the vast majority of the sector, will be the hardest hit by the labor reform. According to Cehat and Hostelería de España, the impossibility of absorbing the higher labor costs and the reduction in hours may compromise the viability of many small businesses.
In addition, the need to hire more staff to cover the lost hours could lead to higher prices, which would affect consumption and competitiveness in comparison with other European tourist destinations.
Industry calls for dialogue and flexibility
In view of this situation, the employers’ associations have urged the government to open a process of dialogue with the sector, with the aim of seeking solutions to maintain productivity and business sustainability.
Cehat has stressed that tourism is a fundamental pillar of the Spanish economy, and that measures of this type must be agreed with the social and economic agents to avoid a negative impact on employment and investment.
For now, the government defends the measure as an improvement in the quality of life of workers, although it has not yet presented concrete support measures for the most affected companies.
What happens now?
The entry into force of the reduction of the working week to 37.5 hours per week will be a major challenge for the hotel and catering and tourism industries, two key sectors for employment and the Spanish economy. Uncertainty as to how this measure will really affect the profitability of businesses and job creation is still on the table, while the sector awaits answers from the Government.
Next steps and entry into force
After its approval by the Council of Ministers, the bill will be sent to the Congress of Deputies for debate and voting. The Government needs to obtain a parliamentary majority for its final approval. The measure is expected to come into force before December 31, 2025, giving companies an adaptation period to implement the necessary changes.
Complementary measures
In addition to the reduction of the working day, the proposal includes the implementation of a new digital and remote time register, which will allow the Labor Inspectorate to monitor the hours worked in real time. It also establishes the unwaivable right of workers to disconnect from work outside working hours, exempting them from responding to work communications outside their working hours.
Reactions and challenges
The Vice-President and Minister of Labor, Yolanda Díaz, has described this reform as a historic step forward for Spain. However, the measure faces opposition from business associations and some political parties, which argue possible increases in labor costs and challenges to business competitiveness. The Government will have to negotiate with the different political forces to ensure its approval in Congress.
