The Spanish government has sanctioned a plan to reduce the standard workweek from 40 hours to 37.5 hours without any pay reductions by the end of 2025. This initiative is part of the coalition agreement between the ruling Socialist Party and the left-wing Sumar party, aiming to enhance productivity and working conditions.

Labour Minister Yolanda Díaz remarked that this reform would modernize Spain’s labor market, which is among the largest in the European Union.

The adjustment is anticipated to affect around 12 million workers, especially in sectors like retail, hospitality, and agriculture, while most public-sector employees and large firms already function on a 37.5-hour schedule.

Spain’s two major trade unions have backed the initiative, yet business representatives withdrew from discussions after 11 months, citing worries about potential economic disruptions.

Business leaders caution that the reform could burden industries already facing difficulties, especially in light of a slight increase in unemployment figures in January.

The proposal now needs parliamentary approval, where it confronts opposition from pro-business Catalan and Basque nationalist parties.

The government will have to garner support from smaller political groups to facilitate the bill's passage.

Spain’s economy expanded by 3.2 percent in 2024, outperforming most of its European counterparts, but concerns linger regarding the long-term effects of labor reforms on economic stability.