Recovering what you are owed and leaving the company with severance are two different legal actions under Spanish law, and confusing them is the most common way to lose money in this kind of case. The first is the wage claim, which rests on article 29 of the Workers’ Statute and serves to demand accrued salary, the final settlement or any unpaid item, plus late-payment interest of ten per cent a year, without touching the contract. The second is termination of the contract at the employee’s request on the ground of the employer’s breach, provided for in article 50.1.b of the same Statute for non-payment or continued delays in paying salary, and it gives the right to the same severance as an unfair dismissal. What many employees actually do, which is to stop turning up because they are not being paid, fits neither of the two. In legal terms it is a resignation under article 49.1.d, and a resignation generates neither severance nor unemployment benefit. Below I explain how each action works, when one or the other applies, and what happens when the employer that does not pay also has nothing to pay with.
When you must be paid and from what day the debt exists
Article 29.1 of the Workers’ Statute requires that salary be settled and paid punctually and with documentary record, on the agreed date and at the agreed place or according to custom, and it prohibits the payment period for regular remuneration from exceeding one month. The precise date is usually set by the collective agreement or by the company’s practice, which in reality means the last day of the month or the first few days of the next. Once that date has passed without payment, the employer is in default. No prior demand is needed for the debt to exist or for interest to start running.
That interest is fixed by article 29.3 at ten per cent a year on the amount owed, calculated from the day each monthly payment fell due until it is actually paid. On three unpaid months of 1,500 euros the interest is modest, but on a debt that has dragged on for two years, which is typical when the employee has put up with it and then claims, the figure starts to matter. The same article requires payment to be documented with the payslip and allows it to be made by bank transfer, which makes the bank statement the main evidence of what was paid and when.
Partial payment and the items that get left behind
Non-payment is rarely total from the first month. What usually happens is that the company pays basic salary and leaves out the supplements, pays part and promises the rest, prorates the extra payments on the payslip and then does not pay them, or settles overtime with promises. All of that is salary for the purposes of article 26 of the Statute and all of it can be claimed, because the debt is made up item by item. The two extraordinary payments under article 31 are compulsory even where the collective agreement allows them to be prorated, and overtime under article 35 is either paid or compensated with rest, but it does not disappear.
Receiving part does not mean waiving the rest. Accepting a partial payment does not prejudice a claim for what is missing, provided nothing has been signed saying otherwise. Payslips handed over for signature with amounts that do not match what was actually transferred are a frequent problem. Signing the payslip proves you received the document, and what you actually received is governed by the bank statement, but if you are given a payslip showing more than was paid it is wise to write «no conforme», meaning not agreed, or «no percibido», meaning not received, next to your signature.
The final settlement and what is usually missing from it
When the employment relationship ends, for whatever reason, article 49.2 of the Statute requires the employer to hand over a proposed settlement of accounts, which is what everyone calls the «finiquito». It contains the salary for the days worked in the final month, the proportional part of any extraordinary payments not yet received and accrued holiday not taken. It does not contain severance, which is a separate item that exists only in dismissals and certain terminations and which often appears in the same document so that the two get confused. The same article allows the employee to ask for a legal representative of the workforce to be present at signing and to have it recorded in the document if none was.
The release effect of the settlement is where most money is lost. A settlement signed with the formula «saldo y finiquito», full and final settlement, and without reservation can close off any claim for what does not appear in it. The courts allow it to be challenged where the document does not reflect a genuine intention to settle or where the waiver covers rights that cannot be waived, and that is an argument that can be won, but it is better not to have it. Signing with the note «no conforme» next to your signature does not prevent you from collecting what the company offers and keeps the claim for the rest open.
The three routes and what each one delivers
Faced with non-payment there are three routes that do not exclude each other, and each one delivers something different. A complaint to the Labour and Social Security Inspectorate can end in a penalty for the employer, because non-payment and repeated delays in paying salary are a very serious infringement under article 8.1 of the Law on Infringements and Penalties in the Social Order, with fines ranging from 7,501 to 225,018 euros depending on the degree. The fine goes to the State, not to the employee, so the Inspectorate applies pressure but does not pay. A wage claim before the Labour Court, preceded by the conciliation attempt that the Law on Labour Jurisdiction requires as a general rule, is the only route that ends in an enforceable title with which to seize the employer’s assets. Termination under article 50, also sought before the Labour Court, is the route that allows you to leave with severance and with the right to unemployment benefit.
| Route | What the employee obtains | Legal basis |
|---|---|---|
| Complaint to the Labour Inspectorate | Fine on the employer of 7,501 to 225,018 euros; the employee does not get paid through this route | Art. 8.1 LISOS |
| Wage claim | The amount owed plus 10% a year in late-payment interest and a court title for enforcement | Arts. 29 and 59 Workers’ Statute |
| Termination of the contract for non-payment | Severance of 33 days per year, capped at 24 months’ salary, plus outstanding wages and unemployment benefit | Arts. 50 and 56 Workers’ Statute |
| FOGASA if the employer is insolvent | Wages up to 120 days at twice the daily minimum wage and severance up to one year’s salary | Art. 33 Workers’ Statute |
The two court actions can be joined in a single claim, and that is what is almost always done, because the facts are the same. Choosing between claiming and staying, claiming and terminating, or waiting for the company to close and going against FOGASA depends on the real state of the company, on length of service and on what the employee needs, and that assessment is what we make at the firm before filing anything. In our employment law practice that first review includes going through the payslips and the collective agreement to establish how much is really owed, which almost never matches what the employee believes.
How many unpaid months justify terminating the contract with severance
Article 50.1.b refers to non-payment or continued delays, and since 3 April 2025 it spells out when they exist. There is a delay when salary is paid more than fifteen days after the agreed date, and the ground exists when three full monthly salaries are owed within a year, even if not consecutive, or when payment is late for six months, not necessarily consecutive either. The judge may also accept other situations. The employer does not need to be at fault, and not paying because it cannot is no excuse. An isolated delay of a few days, or one late month that is then regularised, is not enough and can end in a judgment dismissing the claim, leaving the employee where they were but at odds with the employer.
Termination under article 50 is not declared by the employee, it is declared by the judge. Until there is a judgment the contract remains alive and, save for exceptional situations that case law allows, the employee must keep working. Walking out without a judgment turns the matter into a resignation or an abandonment, with the consequences of article 49.1.d noted at the start. It is the most expensive mistake, because whoever makes it loses the severance, loses unemployment benefit and still has to claim the back pay through the ordinary route. If the company brings payments up to date before the claim is filed, the termination loses much of its basis; if it pays afterwards, the action survives, because the serious breach has already occurred.
How much you receive if you terminate and what happens afterwards
Article 50.2 refers to the severance for unfair dismissal, which article 56 sets at 33 days’ salary per year of service, prorated by months for periods of less than a year, with a maximum of 24 months’ salary. For service before 12 February 2012 the earlier rate of 45 days per year applies, subject to the caps in the transitional provision of the Statute. The salary used as the base is the regulating salary, which includes prorated extraordinary payments and salary supplements, and not merely the basic salary shown on the payslip. With a gross annual salary of 24,000 euros and eight years’ service after 2012, the severance comes to around 17,350 euros. On top of that come the back pay with its ten per cent interest and the final settlement.
Termination by judgment places the employee in a legal situation of unemployment, because the General Social Security Law expressly treats termination of the contract under article 50 as an involuntary end of employment. Unemployment benefit is received exactly as after a dismissal, with the same prior contribution requirements. It is the most important practical difference from resignation, which gives no right to benefit. While the proceedings last the employee continues to accrue salary, and whatever the company fails to pay in that time is added to the claim.
If the company closes or enters insolvency, who pays you
Winning the claim is of little use if the company has no assets, and collecting from an empty company raises the same problems as collecting from a debtor who says they have nothing. That is what the Wage Guarantee Fund, FOGASA, regulated in article 33 of the Statute, exists for. It is a public body that pays employees their outstanding wages and certain severance payments when the employer has been declared insolvent or is in insolvency proceedings, and it then steps into the employee’s rights to try to recover from the company. The declaration of insolvency is made by the Labour Court when, having enforced the judgment or the conciliation agreement, it finds insufficient assets; formal insolvency proceedings are opened by the Commercial Court. Without one of those two titles FOGASA does not step in, which means you have to claim and enforce first.
The limits matter. For wages, FOGASA pays a maximum of 120 days, calculated on twice the daily statutory minimum wage including prorated extraordinary payments. For severance it covers dismissals and the terminations under articles 50, 51 and 52, among others, capped at one year’s salary, calculating the severance at 30 days per year of service and on a daily salary that again cannot exceed twice the minimum wage. An employee with a high salary and long service will recover from FOGASA a fraction of what the judgment awarded; the rest remains a debt of the company, and collecting it depends on assets turning up or on being able to pursue the director personally. That last route exists, and it is connected with what we explain about closing a business without dragging your personal assets into it, but it is a separate lawsuit. The deadline for applying to FOGASA is one year from the date of the conciliation record, the judgment or the decision recognising the debt, and the body has three months to decide, a period that in practice is frequently exceeded.
If the company enters insolvency proceedings while you are claiming, the labour proceedings on the merits continue, but individual enforcement is stayed and your claim is paid within the insolvency. The consolidated Insolvency Law gives wages for the last thirty days before the insolvency declaration the status of a claim against the estate, capped at twice the minimum wage, which means they are paid ahead of almost everything else. Earlier wages and severance enjoy a general preference within certain limits, and anything above that is an ordinary claim, which in most insolvencies is not paid. FOGASA pays within its caps and takes over the claim against the insolvent company.
The social security contributions that are not being paid either
Contributions usually fail along with wages. An employer that does not pay salary normally does not pay contributions either, neither its own share nor the employee’s share deducted on the payslip. That debt is not the employee’s and cannot be claimed by the employee for themselves, because the creditor is the Social Security Treasury and the employer is solely responsible for paying the whole contribution, including the part it withheld. What the employee can and should do is check, because the contribution base report and the employment history record, obtained from the Social Security online office, show month by month what has been paid in, and report it to the Inspectorate, which acts effectively here because the Treasury collects through enforcement.
Benefits are not lost because the employer failed to pay. The General Social Security Law treats the employee as registered by operation of law and applies the principle of automatic entitlement to benefits, fully for unemployment and with qualifications for other contingencies, where the benefit is granted and Social Security then pursues the employer. The rule is that an unpaid contribution is the company’s problem with the Treasury, and the employee’s only to the extent that it went undetected.
Domestic workers
Nothing changes in essence. Employment in the family home, regulated by Royal Decree 1620/2011, is a special employment relationship, but non-payment is claimed in the same way, with prior conciliation and a claim before the Labour Court, and the ten per cent interest applies equally. The practical differences lie in evidence, because cash payments without payslips are common in domestic work, and in coverage. Since Royal Decree-Law 16/2022 domestic workers have unemployment protection and FOGASA coverage, which they previously lacked. If the employer is an individual who dies or is left without assets, the claim is directed against the estate, and there the matter becomes more complicated.
Time limits, limitation and the risk of claiming while still employed
Article 59 of the Statute sets a one-year limitation period for actions to claim economic entitlements, counted from the day each one could be demanded. Each month’s pay is time-barred separately, so someone who has gone eighteen months without pay and has done nothing has already lost the first six. After the contract ends, whatever remains outstanding, including the final settlement, is also time-barred one year from the termination date. Filing the conciliation request interrupts that period, which is one of the reasons why it is unwise to wait and let the debt build up before claiming.
Claiming while still employed is a protected right. A dismissal in response to an employee’s claim breaches the guarantee against retaliation, which derives from the right to effective judicial protection under article 24 of the Constitution, and article 55.5 of the Statute declares it void, with compulsory reinstatement and back pay for the interim period. An employer that dismisses shortly after receiving a conciliation request has to prove that the reason was different and genuine. That does not prevent dismissal, but it makes it far more expensive, and in practice it is a risk that most companies still operating do not take.
Continuing to work without pay does not cost you rights if you claim within time, but it does build up risk, because the larger the debt the more likely it is that the company cannot pay it and the more of what is yours will sit above the FOGASA caps. Accepting a salary below the contractual one for a long time without protest does not turn it into the agreed salary either, though it gives the employer an argument that then has to be dismantled.
What you can do today without making the case worse
Keep the contract, every payslip even if it does not match what you received, the bank statements for the months affected and any message or email in which the company acknowledges the debt or promises to pay. A written acknowledgement, even a message from a supervisor, shortens the case considerably. A written demand from you to the company is not compulsory, but it fixes the date on record and usually prompts a reply that also serves as evidence. Do not sign any settlement, receipt or acknowledgement without recording that you do not agree with the amounts. Do not stop going to work and do not agree to be taken off the books «by mutual agreement» so as to claim unemployment benefit, because mutual agreement does not give it. Do not accept cash payments without a receipt. And check on the Social Security online office whether contributions are being paid for you, because that is information the company will not give you.
Claiming on your own or with the firm
Claiming without a lawyer is possible, and in small, clear cases it can be enough. The risk of doing it without proper judgement lies in three decisions that cannot be corrected afterwards. Stopping work before the judgment turns a termination with severance and unemployment benefit into a resignation with nothing. Signing the settlement without reservation closes the door on anything not listed in it. And miscalculating the regulating salary, or leaving out items, reduces the severance permanently. In the employment law practice at the firm we conduct wage claims and terminations for non-payment before the Labour Court, from calculating what is owed through to enforcement and, where necessary, the application to FOGASA. You can reach us on +34 677 841 007 or through the contact page. When you call, have to hand the contract, the latest payslips, the bank statements for the unpaid months and, if the employment has ended, the settlement document you were given, signed or not. With that we can tell you in the first conversation how much you are owed and which route suits.
Frequently asked questions
How many months’ pay must the employer owe me before I can terminate the contract with severance?
Since 3 April 2025 article 50.1.b of the Workers’ Statute spells it out. It is enough that three full monthly salaries are owed within a year, even if not consecutive, or that salary arrives more than fifteen days late for six months, not necessarily consecutive either, and the judge may accept other cases. It does not matter that the employer is not at fault. One late month that is then regularised is not enough. Until the judge issues a judgment the contract remains alive and you must keep working, save in exceptional situations.
Am I entitled to unemployment benefit if I am the one who terminates the contract for non-payment?
Yes, provided the termination is declared by the Labour Court under article 50. The General Social Security Law treats that termination as an involuntary end of employment and gives access to unemployment benefit on the same conditions as a dismissal. If instead you stop going to work or sign a voluntary resignation or a mutual agreement, you get neither benefit nor severance.
Can I claim my wages if I no longer work for the company or if I was paid only part of them?
You can claim in both cases. Outstanding amounts can be claimed even after the employment has ended, subject to the one-year limitation period in article 59 of the Statute, which runs for each month from when it fell due and for the final settlement from the termination date. A partial payment does not amount to waiving the rest, and supplements, extraordinary payments, overtime and untaken holiday are claimed item by item. The only thing that can close off the claim is a settlement signed without a note that you do not agree.
Do I need a lawyer for conciliation or the Labour Court, and how much does it cost?
It is not compulsory at first instance, there are no court fees for employees and costs are not generally awarded in these cases, so the cost is the lawyer’s fee, which is quoted at the outset according to the amount and the route. If the company is solvent, the debt is small and clearly shown on the payslips, you can try on your own and will probably be paid at conciliation. A lawyer is worth it when the debt is large, when you want to terminate the contract under article 50, when there is a signed settlement or disputed amounts, when the company is in difficulty and enforcement or FOGASA will be needed, or when the company turns up with a lawyer, which is almost always.
I worked in Spain for a Spanish company, have since moved back home and am still owed my last wages and final settlement. Can I claim from abroad without speaking Spanish?
Yes. The claim is brought before the Spanish labour conciliation service and, if unresolved, the Labour Court of the province where you worked, and the one-year limitation period under article 59 of the Workers’ Statute runs from the termination date, so it should be filed without delay. You do not need to be in Spain: with a power of attorney, which can be granted before a notary or a Spanish consulate in your country, we represent you at conciliation and in court, and you only attend the hearing if the judge requires your testimony, often by videoconference. We handle the whole matter in English, including FOGASA if the company turns out to be insolvent.