Getting paid on time is not a courtesy from a company; it is a legal obligation.
However, delays in wage payments are more common than we think, especially when some companies face financial difficulties or liquidity problems.
But what many employees don’t know is that Spanish labor law provides mechanisms to protect workers in these situations.
Labor lawyer Ignacio de la Calzada, known on TikTok as Un Tío Legal, reminds us that companies have an obligation to pay salaries promptly and that workers have legal tools to claim when this does not happen.
Payroll Delays Have Consequences for the Employer
The labor regulations require that salaries be paid on the date agreed between the employer and the employee. When a delay occurs, even if it is only for one monthly payment, the employee can claim the outstanding amounts.
According to Ignacio de la Calzada, “employers, regardless of the reasons, are obliged in any circumstance to pay your salary on time, and it is not legal to owe you anything.”
Moreover, the delay not only obliges the payment of the outstanding amount. The law provides for an annual late interest of 10% on the amounts owed. This rate is not applied in full in every situation; it is calculated proportionally to the time elapsed since the payment should have been made.
The lawyer clarifies this point by saying, “if they owe you a payroll, they must pay you a 10% annual interest, but if they owe you five days, they won’t pay you 10% for five days; you have to calculate that 10% over 365 days.”
When Unpaid Wages Allow You to Leave the Company with Compensation
Problems become especially serious when delays stop being occasional and turn into a habitual practice.
In these cases, the legislation offers a route that many workers are unaware of. It is the possibility of requesting in court the termination of the contract for serious breach by the employer.
Ignacio de la Calzada summarizes this possibility with a blunt phrase: “They owe you three paychecks, go with severance and unemployment.”
Nevertheless, to access this measure certain circumstances set out by labor regulations and supported by jurisprudence must be met.
The Two Scenarios That Can Open the Door to Self-Termination
The first situation occurs when the company accumulates three full monthly salaries unpaid to the employee.
The second arises when there are ongoing delays in paying salaries over an extended period. For example, when the company used to pay on a specific date each month and begins to delay systematically.
Regarding this, the lawyer explains that the possibility of pursuing this route exists “if your company has three unpaid full salaries or if, for instance, it delays salary payments when it used to pay on the 5th, now it does not, and it has been more than six months and the delay is more than 15 days.”
When any of these circumstances arises, the worker may initiate a judicial proceeding to seek the termination of the employment relationship.
What Exactly Is Self-Termination
Although popularly known as self-termination, legally it is a termination of the contract brought about by the employee due to the employer’s serious breach of obligations.
It does not entail voluntary resignation nor quitting the job. On the contrary, it is a measure designed to protect the employee when the company fails to meet one of its essential obligations.
As explained by Ignacio de la Calzada, “a self-termination procedure is started. Basically it is the termination of the employment contract at the employee’s initiative because the company is failing to meet one of its obligations, in this case the timely payment of salary.”
For this, it is necessary to go to the courts and properly prove the existence of unpaid or repeated delays.
The Compensation Can Be Equivalent to That of an Unfair Dismissal
One of the main advantages of this procedure is that the worker can obtain compensation similar to what they would receive if they had been dismissed for unfair dismissal.
Depending on seniority and the specific terms of the contract, the compensation can reach 33 days’ salary for each year worked or even 45 days for certain periods prior to the labor reform.
The labor lawyer explains that the affected person can end up obtaining “compensation for unfair dismissal, that is, 33 days, 45 per year, in addition to being able to go on unemployment because you left, but it’s not of your own will; it’s due to your company’s breach.”