Employer of Record (EOR) in Spain: Risks and Alternatives

“Employer of Record” is a commercial label, not a status that by itself authorises labour supply in Spain. The legal assessment follows how the relationship actually operates: who selects, directs, organises, evaluates and disciplines the worker, provides resources and assumes business risk.

The Spanish rule

Article 43 of the Spanish Workers' Statute states that hiring workers in order to assign them temporarily to another company may only be carried out through a duly authorised temporary-work agency under the statutory regime. Illegal supply exists, among other cases, where the service contract merely makes workers available, the supplier lacks its own stable activity or organisation, does not provide the necessary resources or does not perform inherent employer functions.

What CJEU case C-441/23 means

On 24 October 2024, the Court of Justice of the European Union held that an entity may fall within the EU concept of a temporary-work agency even if national law does not recognise it as such, where it hires a worker to assign that person temporarily to a user undertaking under the latter's supervision and direction. The consequence is application of Directive 2008/104 worker protection; the judgment does not grant an EOR licence or validate the arrangement under Spanish law.

Risk indicators

• the client determines daily tasks, schedule, leave and performance;
• the worker is integrated into the client's teams and systems like ordinary staff;
• the provider is limited to the contract, payroll and invoicing;
• there is no autonomous service, deliverable or provider organisation;
• the role covers a structural need and continues without reassessing the model;
• the client controls selection, replacement and disciplinary decisions in practice.

No single indicator decides the issue. The contract and daily operation must be assessed together.

Potential consequences

If illegal labour supply is established, supplier and client are jointly liable for employment and social-security obligations. The worker may choose permanent status with either company, with seniority from the start of the illegal assignment, without prejudice to penalties and other liability.

Alternatives

• Own entity or establishment: for a stable presence where the business directly manages the team.
• Authorised temporary-work agency: where a temporary need fits the statutory grounds.
• Genuine services contract: the supplier organises an autonomous service or result with its own resources and real employer functions.
• Intra-group posting: only where immigration, employment, tax and social-security rules allow it; it does not remove the article 43 analysis.

Pre-contract review

1. Define duration, activity and business reason.
2. Map employer decisions and daily supervision.
3. Verify the provider's authorisation and operating model, not only its contract wording.
4. Review equal treatment, health and safety, data and social security.
5. Set an exit point to an own entity, authorised agency or autonomous service if the facts change.

NRRO can review the contractual and operating model for Spain. This guide does not assess other countries and is not a substitute for case-specific advice.

Official sources

• Spanish Workers' Statute, article 43.
• CJEU case C-441/23, judgment of 24 October 2024.
• Directive 2008/104/EC on temporary agency work.
• Spanish Temporary Work Agencies Act 14/1994.

Reviewed on 27 August 2026.