Reduction of the working week to 37.5 hours: what it means for your company
The current situation regarding the reduction of the working week to 37.5 hours in August 2026: what was approved, what wasn’t, what the current statutory working week is, and what is already changing under collective agreements.
Updated as of 12 August 2026. This is a developing issue. Everything below reflects the regulatory situation as of this date, with official sources linked so that you can check them yourself.
TL;DR
The reduction of the working week to 37.5 hours is not in force in Spain. The bill that would have introduced it was rejected in the Congress of Deputies on 10 September 2025, and since then the statutory maximum working week has remained 40 hours of effective work per week, averaged over the year. That said, it would be a mistake to conclude that nothing is happening: the average working week actually agreed in collective bargaining agreements has already fallen to 38.1 hours. In other words, the reduction is taking place, but through collective bargaining rather than through the BOE. For most companies, this means that the relevant question is not what the law says, but what their collective bargaining agreement says.
Where does the reduction of the working week to 37.5 hours really stand?
It is worth starting by clearing up a widespread misunderstanding, because in recent months a great deal of information has circulated that assumes an obligation that does not exist. The bill promoted by the Ministry of Labour and Social Economy to set the ordinary working week at 37.5 hours was approved by the Council of Ministers and began its parliamentary passage, but it did not get past the motions to reject the bill in its entirety.
The vote took place on 10 September 2025, with 178 votes in favour of the motions to reject the bill in its entirety and 170 against, with no abstentions. As a result, the bill was returned to the Government and its passage came to a halt. This was not a technical postponement or a change to the timetable: the bill lapsed and, for the measure to move forward, a new legislative procedure would have to begin from scratch.
There is one detail about that vote that is often overlooked and is very important for understanding the current situation. That bill did not only contain the reduction of the working week: it also included reform of working-time records to make them digital and interoperable, and regulation of the right to disconnect digitally. When the bill fell, all three measures fell with it. That is why the Government subsequently tried to move forward with working-time records through secondary legislation, separating them from the original package.
What is the statutory maximum working week in Spain today?
The reference remains Article 34.1 of the Workers’ Statute, approved by Royal Legislative Decree 2/2015 of 23 October. That provision sets the maximum duration of the ordinary working week at 40 hours of effective work per week, averaged over the year, and it has not been amended.
The three words most often forgotten in that definition are "averaged over the year". The 40-hour week is not a rigid weekly cap that can never be exceeded in any given week: it is an average over the year. This allows perfectly lawful irregular distributions of working time, provided that minimum rest periods and the limits set by the applicable collective bargaining agreement are respected. Many companies have shorter working days in summer and longer working days during peak periods precisely under this annual averaging system.
It is equally important to understand what the law establishes: a maximum, not a standard. Nothing prevents a collective bargaining agreement or an individual employment contract from setting a shorter working week, and in fact this is already the case across a large part of Spain's business sector. The statutory working week sets the ceiling; the real level is determined through negotiation.
How much flexibility does the current law already provide?
One thing we frequently observe is that companies discuss the reduction of the working week to 37.5 hours without first exploring the flexibility that the current framework already gives them. And it is considerably broader than is often assumed. Article 34.2 of the Workers’ Statute provides that, in the absence of an agreement, the company may distribute ten per cent of working time irregularly over the course of the year.
That ten per cent is not a minor figure. For a standard annual working schedule, it is equivalent to being able to shift several weeks' worth of working time from one period to another without needing prior agreement. The rule imposes three safeguards that are worth understanding well because they are the ones most often breached: minimum daily and weekly rest periods must always be respected, the employee must be given at least five days' notice of the specific day and time of the resulting work, and any differences must be offset within twelve months of arising.
It is important not to confuse this mechanism with overtime, because the legal and financial treatment is completely different. Irregular distribution does not increase the contracted working time: it only changes how it is arranged over time, so that an excess in some weeks is offset by less work in others within that twelve-month period. Overtime, by contrast, is work performed beyond the agreed working time, with its own limits and its own pay or time-off arrangements. Many companies that believe they have an excessive-hours problem actually have a poor-distribution problem, and that can be resolved today without waiting for any reform.
Why is the average working week falling even without a law?
Here is the figure that, in our view, should be of greatest interest to a company and has generated the fewest headlines. Although the reduction of the working week to 37.5 hours was not approved, the average working week agreed in collective bargaining agreements in Spain has fallen to 38.1 hours, compared with 38.4 hours a year earlier. The reduction is happening anyway, but it is being negotiated sector by sector and company by company.
The nuance is that this decline has been slowing. Agreements signed during the first quarter of 2026 average 38.8 hours per week, above the average for all agreements currently in force. This suggests that the most substantial reductions were agreed in previous years and that recent negotiations are progressing at a more moderate pace, probably while waiting to see what happens at the legislative level.
For an individual company, the practical consequence is straightforward: the working time that binds you today is not in the BOE; it is in your collective bargaining agreement. Your sector may already be below 40 hours without you being aware of it, or the next renewal of your agreement may bring a reduction that should be factored into planning. Reviewing the applicable agreement, its term and its renewal timetable is a more useful task right now than following the parliamentary debate.
What is the situation for each type of company?
Those aggregate figures point to something that, in practice, divides companies into three very different groups, and knowing which one you are in completely changes how this issue should be viewed. The first consists of companies whose collective bargaining agreement already sets a working week of 37.5 hours or less. There are more of them than is generally thought, particularly in banking, insurance, some public administrations and certain branches of professional services. For them, any eventual approval would make no difference in terms of working time.
The second group is in the middle range, between 38 and 39 hours, where the Spanish average is concentrated. Here, a reform would have an impact, but it would be manageable: between half an hour and an hour and a half of weekly adjustment, which in most organisations can be absorbed by reorganising the week rather than hiring. This group also has the most to gain from reviewing its collective bargaining agreement, because the next renewal is likely to include a negotiated partial reduction.
The third group consists of companies operating at the full 40 hours, often in sectors that are highly dependent on physical presence: hospitality, retail, logistics, customer service and security. For them, the move to 37.5 hours would be structural, because every hour less per person is an hour that someone else has to cover. This is the group with the strongest reasons to follow the debate closely and, above all, to have the calculations done before it arrives rather than afterwards. One honest nuance should be added: if your company applies several collective bargaining agreements because it carries out different activities, you may belong to two groups at once, and that is precisely the scenario in which it is worth sitting down with your adviser.
What would it mean for your company if it is eventually approved?
The Government has not abandoned the measure, and Sumar has announced its intention to revive it in September 2026. As of today, there is no text currently going through Parliament and no fixed timetable, so any forecast about timing would be speculative. What can be anticipated with some logic is the nature of the impact, because the rejected bill made the likely direction fairly clear.
The key point of the original proposal was that the reduction would be applied without any reduction in pay. This is what determines the real cost: for a workforce that currently works 40 hours, moving to 37.5 means a 6.25% reduction in working time while maintaining pay. In companies where work is measured by hours of presence —customer service, shifts, production— this translates into a need to reorganise shifts or hire. In companies where work is measured by projects and results, the impact is significantly smaller and in many cases can be absorbed through organisational adjustments.
| Current situation (August 2026) | Bill rejected in 2025 | |
|---|---|---|
| Maximum ordinary working week | 40 hours per week, averaged over the year | 37.5 hours per week, averaged over the year |
| Rule establishing it | Art. 34.1 of the Workers’ Statute | Lapsed bill |
| Effect on pay | — | Reduction without any reduction in pay |
| Working-time records | Mandatory since 2019, format unrestricted | Digital and interoperable |
| Right to disconnect digitally | Regulated under data protection legislation | Specific employment-law regulation |
| Status | In force | Returned to the Government on 10/09/2025 |
There is a third category of company worth mentioning, because it is the most numerous among our clients: those already below 37.5 hours or very close to it, either under a collective bargaining agreement or their own policy. For them, any eventual approval would be practically a non-event in terms of working time, although it would have effects in relation to working-time recording and monitoring.
How do you calculate the real impact of moving from 40 to 37.5 hours?
The starting calculation is simple and worth doing even if the reform never arrives, because it is the same calculation required for any collective bargaining negotiation. Moving from 40 to 37.5 hours per week means 2.5 fewer hours per person per week, i.e. 6.25% less working time. If the reduction is applied without any reduction in pay, that 6.25% is exactly the increase in the cost per effective hour worked.
However, that percentage does not automatically translate into 6.25% more personnel expenditure, and this is where many analyses jump to conclusions. It only translates into additional hiring when the work requires continuous coverage of a position: a reception shift, a checkout, a production line, a customer service operation with committed opening hours. In those cases, the arithmetic is unforgiving and should be done by position and time slot, not across the workforce as a whole, because the coverage shortfall is almost never distributed evenly throughout the day.
In organisations where work is measured by projects, deliverables or results, the real impact depends on how much slack there is in the current working day. The useful question here is not how many hours appear in the contract, but how many hours of effective work each person produces today and how much of that time is spent on avoidable meetings, waiting or duplicated tasks. It is an uncomfortable but worthwhile conversation: we have seen companies that, after examining it seriously, discovered that they could absorb a reduction in working time without hiring anyone, and others that discovered the opposite. Neither knew before looking at the numbers.
What role does overtime play in all this?
Any reduction in working time has a secondary effect that deserves its own section, because it is the one that causes the most problems: when working time is reduced without reorganising the work, the work does not disappear; it shifts. And it usually shifts into overtime, which has its own rules and limits.
The main limit is quantitative. Article 35.2 of the Workers’ Statute sets 80 as the maximum number of overtime hours an individual may work in a year. It is not an indicative limit: exceeding it is a breach in itself, regardless of whether the hours are paid or compensated correctly. A company that reduces working time on the assumption that the difference will be covered by overtime may find that the limit is exhausted halfway through the year.
That is why the sensible sequence is the opposite of what is often seen. First, measure how much work there really is and how it is distributed; then decide whether it can be reorganised, whether it is appropriate to use the irregular distribution already permitted by law, and only at the end consider hiring or using overtime. Starting at the end —announcing the reduction and seeing later how it will be covered— is the fast track to a compliance problem. And because everything relating to working time and overtime is evidenced through working-time records, this is also the practical reason why it is advisable to have those records properly maintained before changing anything.
What should you do now, and what should you avoid?
The first thing we would recommend is not to bring forward structural decisions on the basis of a rule that does not exist. We have seen companies rethink staffing levels or renegotiate conditions in anticipation of a reduction of the working week to 37.5 hours that was never approved, and undoing those decisions afterwards is costly and awkward. Preparing is not the same as implementing.
The second, and this is useful whatever Parliament does, is to know how many hours your workforce actually works. Not the contractual hours: the real ones. When organisations look seriously at the data, many discover that the gap between theoretical and actual working time is larger than they assumed, in one direction or the other. That diagnosis is the basis for any subsequent decision and, moreover, is exactly what the working-time recording rules already in force require.
There is a knock-on effect that almost nobody anticipates and that is worth keeping on the radar if you employ part-time staff. A part-time contract is defined by comparison with the working time of a comparable full-time employee, so if that reference falls, the part-time percentage of your contracts changes automatically. Someone contracted for 20 hours is currently at 50% of a 40-hour working week; with a full-time week of 37.5 hours, they would be at around 53%. It is not a problem, but it does involve documentation and social security contribution adjustments that need to be anticipated and, in workforces with a high proportion of part-time staff, means reviewing quite a few contracts at once.
The third is to discuss it with the right professional. At Centro de Negocios Ibercenter, we have been supporting companies in Madrid for more than thirty years, and we are clear about what our role is and what it is not: we are not employment advisers, and this article is for information purposes, not a legal opinion. Any decision about working time, collective bargaining agreements or workforce reorganisation should be reviewed by an employment adviser or specialist lawyer who knows your case. What we can contribute is the part that concerns us: the workspace.
How does this fit with the organisation of the workspace?
This entire discussion has a real-estate dimension that is rarely mentioned and that reaches us in the form of enquiries almost every week. When a company reduces working time, makes it more flexible, or combines on-site presence with remote work, the average occupancy of its office changes. Yet the traditional lease does not change: it remains the same number of square metres for the same number of years.
That mismatch is what pushes many companies towards more flexible arrangements. A private office sized to actual occupancy, with the ability to expand or reduce without renegotiating a five-year lease, is a better fit in a scenario where the organisation of working time is under review. At our three Madrid locations —Velázquez 157, AZCA and Gran Vía 6— we frequently see companies adjusting their space for precisely this reason.
Our practical recommendation, when someone raises this question with us, is to calculate the cost per workstation actually occupied rather than per square metre leased. These are two figures that can differ enormously in a traditional office with irregular occupancy, and the latter is the one that usually appears in the budget while the former is the one that shows whether the space is properly sized. When a company makes that calculation for the first time and discovers what each workstation costs on the days nobody uses it, the conversation about flexibility stops being theoretical.
The use of meeting rooms changes too. When the working week is compressed, meetings tend to become more concentrated and deliberate: fewer available hours force companies to be more selective about what merits an in-person meeting. For companies with distributed teams, having access to meeting rooms by the hour when needed, without carrying underused space for the rest of the month, is usually more cost-effective than maintaining a dedicated boardroom that is used twice a month.
Frequently asked questions about the reduction of the working week to 37.5 hours
Is my company required to apply the 37.5-hour working week in 2026?
No. As of August 2026, there is no legal obligation to apply a 37.5-hour working week. The bill that would have introduced it was rejected in Congress on 10 September 2025, and the statutory maximum remains 40 hours per week, averaged over the year. It is a different matter if your collective bargaining agreement sets a shorter working week, in which case the agreement is binding on you.
Can I introduce the reduction in working time voluntarily?
Yes. The law sets a maximum, not a minimum, so nothing prevents a shorter working week from being agreed through a collective bargaining agreement, a company agreement or individual employment contracts. However, it is worth bearing in mind that reducing working time below the agreed level usually creates a more favourable condition that is difficult to reverse unilaterally afterwards. This is precisely the kind of decision that should be reviewed with an employment adviser before it is formalised.
What happened to working-time records and the right to disconnect digitally?
They were part of the same bill and lapsed with it. Afterwards, the Ministry of Labour chose to separate working-time records and move them forward through secondary legislation, by means of a Royal Decree that, as of today, has still not been published in the BOE. The obligation to record working time, however, has been in force since 2019 and is independent of this entire process.
Will the reduction of the working week be brought before Parliament again?
That is the Government's stated intention, and Sumar has announced that it will be revived from September 2026. But an intention is not a timetable: a completely new legislative procedure would be required and, above all, a parliamentary majority that did not exist in 2025. The prudent approach is to follow developments closely without assuming any particular timeframe.
If you are rethinking how and where your team works, at Ibercenter we can help with the workspace side: private offices sized to your actual occupancy, meeting rooms by the hour and business address services at three prestigious locations in Madrid. For the employment-law side, rely on your adviser: that is their field, and with issues like these, it is best that it remains so.
