Overtime in the SME: the 80-hour limit, pay or compensation, record and penalties in Spain

Overtime is the point where the working-time record turns into money. Since companies record working time every day, hours that used to be worked and forgotten appear in a report, and the Labour Inspectorate cross-checks them with payroll at every visit. In an SME the problem is rarely bad faith: it is not knowing precisely what overtime is, what the limit is, whether it must be paid or can be compensated, how it is recorded and what happens with part-time contracts. This guide answers all of that with article 35 of the Workers’ Statute and the Law on Infringements and Penalties in hand.

What an overtime hour is

Under article 35.1 of the Statute, it is each hour of work performed above the maximum duration of ordinary working time set by the agreement or the contract. Since working time is computed as an annual average, a 42-hour week does not necessarily generate overtime if the agreement allows irregular distribution and those hours are compensated within the reference period; what counts is exceeding the agreed ordinary working time in the applicable computation. So the first question is not “how many hours did this person work this week?” but “what is their ordinary working time and over what period is it computed?”.

There are two kinds:

• Ordinary overtime: voluntary or agreed to meet peaks of work.
• Force majeure overtime (art. 35.3): necessary to prevent or repair accidents and other extraordinary and urgent damage. It is compulsory, does not count towards the annual limit and is compensated like the rest.

The limit: 80 hours a year

Article 35.2 sets a maximum of 80 overtime hours a year per worker. For contracts shorter than a year, the limit is reduced proportionally. Two nuances matter:

• Hours compensated with rest within the four months following their performance do not count towards that limit, nor do force majeure hours.
• The agreement may set a lower limit, but not a higher one.

In other words, a company that compensates overtime with rest within four months does not use up the limit; one that pays it does. Exceeding 80 paid hours is an infringement, regardless of whether they were paid correctly.

Voluntariness

Working overtime is voluntary, unless it has been agreed in a collective agreement or in the individual employment contract, within the legal limit, and except for force majeure. A worker may refuse unagreed overtime without disciplinary consequences, and the internal policy should say so.

Pay or compensation with rest

Article 35.1 leaves the choice to the agreement or, failing that, the individual contract: overtime is paid at the amount set, which may not be lower than the value of the ordinary hour, or compensated with equivalent paid rest. If there is no agreement, it is understood to be compensated with rest within the following four months.

Practical consequences:

• You need to know the value of each person’s ordinary hour (annual salary divided by annual working hours) so as not to pay below it.
• Compensation in rest must be taken within four months; after that, uncompensated hours are paid and count towards the limit.
• Paid overtime is subject to Social Security contributions with its own additional rate, different for force majeure and other overtime, and is taxed as salary.
• The agreement may set premiums over the ordinary hour; the Statute only sets the floor.

Mandatory record and copy to the worker

Article 35.5 requires each worker’s working time to be recorded day by day and totalled in the period set for paying wages, delivering a copy of the summary to the worker in the corresponding payslip. It is an obligation distinct from and older than the general working-time record of article 34.9: the general record proves working time; the monthly overtime summary proves how many overtime hours were worked and how they were compensated. Without a record, the burden of proof in court turns against the company and the Inspectorate estimates the hours.

Part time: no overtime

Part-time workers may not work overtime, except force majeure (art. 12.4.c of the Statute). What exists are complementary hours (art. 12.5): agreed in writing, up to 30 % of the contract’s ordinary hours (extendable to 60 % by agreement), with three days’ notice, plus voluntary ones up to 15 % (extendable to 30 %) in open-ended contracts, provided working time is not below ten hours a week on an annual basis. Recording overtime on a part-time contract is a frequent error that the Inspectorate reclassifies as actual working time above what was agreed.

Penalties

• Not recording working time or the overtime summary, and exceeding the 80-hour limit or the limits on working time and rest, are serious infringements in employment relations (article 7.5 of the LISOS), fined between €751 and €7,500 depending on the grade, with the amounts of Royal Decree 306/2024.
• Not paying or paying below the value of the ordinary hour also generates the worker’s claim for the differences, with surcharge and interest, and the regularisation of contributions with Social Security.
• If undeclared overtime conceals actual working time above what was contracted, the Inspectorate may require registration or regularisation of working time and the corresponding contributions.

The full table is in penalties for failing to comply with time tracking.

How to manage it without problems

1. Define each person’s ordinary working time and its computation period according to the agreement, and configure it in the system.
2. Decide in internal policy whether overtime is compensated with rest or paid, with what premium if the agreement sets one and how it is authorised: unauthorised overtime is still overtime if the company knows of it and allows it.
3. Record day by day with time tracking, so the system calculates hours above ordinary time without manual intervention.
4. Watch the limit: an alert when a person approaches 80 paid hours in the year, and the four months for hours pending compensation.
5. Close the month: overtime summary per person to the payslip and to the accountant, with what was paid and what was compensated.
6. Act on the cause: structural overtime points to understaffing or poor organisation, and is the silent talent leak we describe in talent retention in SMEs.

How LapsoWork does it

The time tracking software records working time with timestamping, calculates effective hours against the ordinary working time configured for each person, shows overtime and deviations in reports by site, team or employee, and exports the monthly summary in audited PDF and CSV for the payslip and the accountant. On the Advanced plan, the shift module applies the agreement’s rest rules to rosters. From €2 per employee per month, no lock-in.

Frequently asked questions

What is the legal limit on overtime in Spain?

Eighty hours a year per worker, under article 35.2 of the Workers’ Statute, reduced proportionally in contracts of less than a year. Hours compensated with rest within the following four months and force majeure hours do not count towards that limit. The agreement may set a lower limit.

Is overtime paid or compensated with rest?

Whatever the agreement or, failing that, the contract sets: it is paid at least at the value of the ordinary hour or compensated with equivalent paid rest. If there is no agreement, it is compensated with rest within the four months following its performance.

Is it compulsory to work overtime?

No, unless it has been agreed in a collective agreement or in the contract within the legal limit, and except for force majeure overtime to prevent or repair accidents and urgent damage, which is compulsory.

Can a part-time worker work overtime?

No, except force majeure. In part-time work there are complementary hours under article 12.5 of the Statute, agreed in writing and limited to 30 % of ordinary hours (extendable to 60 % by agreement) plus 15 % voluntary in open-ended contracts (extendable to 30 %).

Must the worker be given a summary of their overtime?

Yes. Article 35.5 requires recording working time day by day, totalling it in the wage payment period and delivering a copy of the summary to the worker in the corresponding payslip. It is an obligation distinct from the general working-time record of article 34.9.

Conclusion

Overtime has clear rules: above ordinary working time, a maximum of 80 paid hours a year, voluntary unless agreed, paid at least as the ordinary hour or compensated within four months, recorded day by day with a monthly summary to the worker, and never in part-time work. Complying requires a record that calculates it automatically and a policy that says what is done with it. To see yours with data, try LapsoWork free for 30 days.