False Self-Employment and Retirement Benefits in Spain: Can the Company Be Obliged to Bear the Benefits?

Published on 22 April 2026

This question was recently analysed by the Spanish Supreme Court (Tribunal Supremo) in its ruling 273/2026 of 12 March 2026. The relevant facts of the case, in summary, were as follows:

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  1. By virtue of a final ruling, the relationship which existed between a worker and a company from June 1996 to February 2013 and which had been presumed to be a self-employment relationship constituted in fact an employment relationship for all legal purposes. The company accepted all consequences arising from the said ruling, including the payment of Social Security contributions which at that time had not been time-barred (November 2011 to March 2013).
  2. With effect from 1 November 2021, the Nacional Social Security Institute (Instituto Nacional de la Seguridad Social, INSS) recognised the worker’s entitlement to retirement benefits calculated based on a base amount of 1.360,83 €.
  3. The worker challenged this decision of the INSS, arguing that the base amount for the calculation of the retirement benefits should also take into account the remuneration received during the false self-employment.
  4. The Labour Court nº 1 of Barcelona upheld the worker’s claim and sentenced the INSS to pay retirement benefits, from 1 November 2021, considering a base amount of 2.324,93 € and a percentage of 96,5%. Furthermore, the company had to deposit the capital value for the difference in benefits resulting from the failure of payment of contributions between June 1996 and October 2011 (both included).
  5. The High Court of Catalonia dismissed the appeals filed by both the INSS and the worker and upheld the decision of the Labour Court in its ruling nº 2440/2024 of 15 April.
  6. The INSS and the General Social Security Treasury (Tesorería General de la Seguridad Social, TGSS) lodged an appeal (recurso de casación) against the decision with the Spanish Supreme Court, requesting harmonisation of the caselaw of the High Court of Catalonia.

Taking these facts into account, the Spanish Supreme Court, applying the doctrine established in its ruling 700/2020 of 22 July concluded that, even though the company had paid the not time-barred contributions following the final ruling which recognised the employment character of the relationship with the worker and even though it had neither acted in bad faith nor in resistance to compliance, the reality was, that for almost 17 years the company had not made the correct contributions to the general Social Security regime. While this non-compliance did not deprive the worker of their entitlement to receiving retirement benefits as such, it did affect the amount of the said benefits. For this reason, the court held that the company had to proportionally bear the economic damage caused, being liable for the difference in the base amount of the retirement benefits to the amount exceeding the amount recognised by the INSS.

In light of this, the court decision confirms that the violation of registration and contribution obligations with Spanish Social Security may not cause a detriment to the benefits a worker may be entitled to, even if the contributions which are not time-barred have been corrected. For any such detriment, companies may be held liable and may have to bear the responsibility in proportion to the consequences of such violations on the benefits.

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