Employees vs Independent Contractors in Spain

Last Updated on 2 days ago by International Employment Specialists

For international companies entering the Spanish market, the choice between an employee and an independent contractor can appear straightforward. An employee joins the organisation and receives salary through payroll; an independent contractor provides services, issues invoices and manages their own business obligations.

In practice, the distinction is considerably more important.

Spanish employment law looks beyond the wording of an agreement and considers how the relationship actually operates. A professional registered as autónomo can still be treated as an employee if the working arrangement shows the characteristics of dependent employment.

This is why an employee vs contractor Spain assessment should take place before the person starts work — not after the commercial contract has already been signed.

For employers, incorrect classification can lead to Social Security liabilities, employment claims, penalties and intervention by the Spanish Labour and Social Security Inspectorate. Spain’s Labour Inspectorate specifically identifies falsos autónomos — false self-employed workers — as a category of potential labour fraud.

The correct question is therefore not simply:

Can this person register as self-employed?

It is:

Will this person genuinely operate an independent business, or will they work under the organisation and direction of our company?

That distinction determines whether contractor status is likely to be sustainable.

Table of Contents

What Is an Employee in Spain?

The starting point is Article 1 of the Spanish Workers’ Statute, the Estatuto de los Trabajadores.

It applies to people who voluntarily provide paid services for another party and within the organisation and direction of an employer.

Two concepts are particularly important when analysing employment status in Spain:

dependencia — dependence or subordination to the employer; and

ajenidad — broadly, working for another party that receives the economic benefit of the work and assumes the business risk.

An employee therefore does more than simply provide a service.

The employee becomes part of the employer’s organisation.

The employer can normally determine responsibilities, organise working arrangements, supervise performance and exercise managerial authority, subject to Spanish employment legislation and any applicable collective bargaining agreement.

Employees are also protected by statutory employment rights that do not automatically apply to ordinary independent contractors.

For example, the Workers’ Statute establishes a minimum of 30 calendar days of paid annual leave, although collective agreements or individual contracts can provide more generous terms.

Employment also brings payroll and Social Security obligations for the employer, together with rules governing working time, leave, termination, occupational health and other aspects of the employment relationship.

What Is an Independent Contractor in Spain?

An individual independent contractor is generally known in Spain as a trabajador autónomo.

Spain’s Self-Employed Workers’ Statute defines an autonomous worker as someone who carries out an economic or professional activity habitually, personally and directly, on their own account and outside the organisation and direction of another person.

That final distinction is fundamental.

A genuine contractor should not simply perform an employee role while sending an invoice instead of receiving a payslip.

They should operate with meaningful professional or commercial independence.

Depending on the activity, this may mean the contractor determines how services are organised, uses their own business resources, negotiates commercial terms, assumes some financial risk and provides services as an independent professional rather than as part of the client’s workforce.

Self-employed professionals are generally responsible for their own registration with Spain’s Social Security system under the Régimen Especial de Trabajadores Autónomos (RETA). Social Security confirms that the autonomous worker is directly responsible for requesting the appropriate registration.

But registration as an autónomo is not enough to establish contractor status.

Employment classification depends on the substance of the relationship.

Employee vs Contractor in Spain: The Core Legal Difference

The most useful way to understand the distinction is to look at who is genuinely organising and assuming responsibility for the work.

An employee normally performs work inside the employer’s organisational structure.

A contractor normally provides services through their own independent organisation.

That distinction affects almost every part of the relationship.

An employee is typically paid a salary through payroll. The employer manages payroll deductions and employer Social Security contributions.

A self-employed contractor normally charges an agreed commercial fee, issues invoices and manages their own tax and Social Security obligations.

An employee normally works under the employer’s managerial authority.

A genuine contractor should retain greater autonomy over how the service is performed.

Employees benefit from statutory employment rights and potentially from rights established under an applicable collective bargaining agreement.

Contractors negotiate their commercial conditions under the service agreement and the legislation applicable to self-employed work.

Most importantly, employees normally do not assume the commercial risk of the employer’s business.

Independent contractors should demonstrate at least some characteristics of operating a business on their own account.

The distinction cannot be created solely through paperwork.

What Is a “False Autónomo” in Spain?

A false autónomo, or falso autónomo, is a person formally presented as self-employed even though their actual working relationship has characteristics of employment.

The individual may:

register as an autónomo;
pay their own Social Security contributions;
issue monthly invoices;
sign a commercial services agreement;
describe themselves contractually as an independent contractor.

None of those factors guarantees that the relationship is genuinely self-employed.

If the individual works inside the client’s organisation, follows company instructions, has limited independence and effectively performs work under conditions similar to employees, the relationship may be challenged.

Spanish authorities actively treat false self-employment as a labour compliance issue. The Labour Inspectorate’s fraud-reporting system expressly includes “trabajadores sin contrato y falsos autónomos” — workers without contracts and false self-employed workers — among the irregularities that may be reported.

For employers, this means contractor classification should be approached as a legal and operational decision rather than simply as a payroll preference.

How Spanish Authorities Determine Whether Someone Is Really an Employee

There is no single clause or factor that automatically determines employment status.

The entire relationship should be considered.

Certain indicators, however, make an employment relationship more likely.

Control Over Working Time

The amount of control the company exercises over working hours can be significant.

There is a difference between agreeing commercial availability and imposing an employee schedule.

For example, an independent IT consultant may need to attend a weekly project call at 10:00 or perform system work during a scheduled maintenance period.

Those requirements do not necessarily create employment.

The position becomes more problematic if the company requires the contractor to:

work the same daily hours as employees;
clock in and out;
obtain permission for routine absences;
follow company shift schedules;
maintain continuous employee-style availability.

The more control the client has over when the person works, the more important it becomes to examine whether genuine autonomy still exists.

Control Over How the Work Is Performed

A company purchasing an external service can define its requirements.

It can specify deadlines, technical standards, expected results and security requirements.

However, an independent contractor should normally retain meaningful control over the organisation of their professional activity.

This principle appears directly in Spanish legislation governing self-employed workers.

For economically dependent self-employed workers, the law requires them to carry out their activity according to their own organisational criteria, although they may still receive technical instructions from the client.

That provides a useful distinction for contractor relationships generally.

The client can manage the expected result.

It should be cautious about managing an independent contractor exactly as it would manage an employee.

Integration Into the Company’s Organisation

Organisational integration is another important warning sign.

A contractor can obviously work with employees, join project meetings or access internal systems.

Those factors alone do not determine status.

Risk becomes greater when the contractor is functionally indistinguishable from an employee.

For example, consider someone who:

holds a permanent internal role;

appears in the organisational chart;

reports to a line manager;

participates in employee performance reviews;

follows the same internal HR procedures;

performs the same continuing duties as employees;

and has no meaningful independent business organisation.

In that situation, contractor terminology may not accurately reflect the relationship.

Spain’s rules for economically dependent self-employed workers are informative here as well: such workers must not carry out their activity in a manner indistinguishable from employees working for the client.

Who Provides the Business Infrastructure?

The source of tools, equipment and infrastructure can also matter.

A genuine contractor may operate using their own computer, professional software, office, specialist equipment, insurance or other commercial resources.

For some roles, however, the company legitimately needs to provide equipment.

Cybersecurity requirements may require a contractor to use a company laptop. A laboratory consultant may need to work with the client’s equipment. An engineering professional may need access to facilities owned by the customer.

Company equipment alone does not transform a contractor into an employee.

The wider picture matters.

Spanish law expressly refers, in the context of economically dependent self-employed workers, to having independent productive infrastructure and materials where those resources are economically relevant to the activity.

Financial and Commercial Risk

Independent business activity normally involves some degree of commercial risk.

A contractor may negotiate a project price, incur business expenses, maintain professional insurance, purchase tools, correct problems with deliverables or risk earning less if a project requires more work than expected.

An employee generally does not assume these risks.

For employees, the employer bears the commercial consequences of whether the business makes a profit or loss.

The contractor’s position should therefore reflect more than simply exchanging time for a predictable monthly invoice.

Again, Spanish legislation provides a useful reference point: economically dependent self-employed workers are expected to receive compensation linked to the result of their activity and assume the associated business risk.

Payment Structure

Regular monthly invoices are common among legitimate contractors and do not automatically imply employment.

However, the way remuneration works should be considered alongside the rest of the relationship.

A contractor paid for a defined project, milestone, deliverable or commercial scope may demonstrate clearer business independence.

By contrast, someone receiving the same fixed amount every month simply for being available during employee working hours may appear closer to an employment arrangement.

The invoicing mechanism is therefore evidence of the commercial structure — but it is not decisive by itself.

Exclusivity and Multiple Clients

A common misconception is that a contractor must have several clients to be genuinely self-employed.

That is not always the case.

Spain specifically recognises a category of self-employed professional who can obtain most of their income from one customer: the trabajador autónomo económicamente dependiente, or TRADE.

This means economic dependence alone does not automatically create employment.

But it does require careful analysis.

What Is a TRADE Contractor in Spain?

A TRADE is an economically dependent self-employed worker.

Under Spain’s Self-Employed Workers’ Statute, a contractor can qualify as economically dependent when at least 75% of their income from work and economic or professional activities comes from one client.

This is an important category because it sits between ordinary independent contracting and employment — but it remains a form of self-employment.

A TRADE must still be genuinely autonomous.

Spanish law requires several conditions to be satisfied simultaneously.

Among other requirements, the person must not perform their services indistinguishably from the client’s employees, should have their own economically relevant infrastructure where appropriate, must organise the activity according to their own criteria and must assume business risk.

The TRADE relationship must also be formalised in writing and registered with the appropriate public office.

This creates an important compliance lesson.

Receiving 75% or more of income from one client does not automatically make someone an employee.

But neither does TRADE status provide a way to legitimise an employee-style arrangement.

Operational independence is still required.

TRADE Is Not the Same as a False Autónomo

International employers sometimes confuse these concepts.

They are fundamentally different.

A TRADE is a legally recognised self-employed professional who is economically dependent on one main client but remains operationally independent.

A falso autónomo is someone described as self-employed even though the practical conditions of the relationship may actually amount to employment.

The key difference is therefore not economic dependency alone.

It is organisational dependency.

A consultant may receive 80% of annual revenue from one company and still run an independent professional business.

Another person may receive 100% of income from one organisation because they effectively work as one of its employees.

Those arrangements may appear similar financially but are legally very different.

Employee Rights in Spain

The choice between employment and contracting also affects the rights available to the individual.

Employees fall within Spanish labour legislation and may also be protected by an applicable sector or company collective bargaining agreement.

These protections can affect working time, remuneration, overtime, leave, termination procedures and other employment conditions.

Paid annual leave is one clear example.

Spanish law provides employees with at least 30 calendar days of paid holiday per year.

Ordinary self-employed contractors do not receive employee holiday entitlement from their clients automatically.

Their commercial contract determines how periods of non-availability affect fees and service delivery.

A TRADE has a separate statutory protection: Spanish legislation provides an annual interruption of activity of 18 working days, subject to contractual or professional agreements that may improve that entitlement.

This is another reason employers should understand the precise status of the professional rather than using “contractor” as one broad category.

The Social Security model is also fundamentally different.

For employees, the employer is responsible for employment registration and payroll-related Social Security administration, including employer obligations associated with contributions.

For genuine autónomos, the worker is directly responsible for registering themselves under RETA and managing their self-employed Social Security position.

This difference can make contractors appear administratively simpler for international companies.

But it is important not to reverse the logic.

A company should not classify someone as self-employed because it wants to avoid payroll administration.

The correct classification should be determined first.

The tax and Social Security treatment should follow from that classification.

What Happens if a Contractor Is Reclassified as an Employee?

Incorrect contractor classification can create liabilities extending beyond the contract itself.

If the Labour Inspectorate identifies someone who has been incorrectly treated as self-employed, the Spanish Social Security authorities can register that individual under the General Social Security Regime as an employee. Spain’s Social Security administration has expressly described this procedure in relation to falsos autónomos.

Depending on the circumstances, the business may then face issues involving unpaid Social Security contributions and employment rights.

Administrative sanctions may also apply.

Spain’s Social Order Infringements and Sanctions Act provides penalties for serious Social Security infringements and contains specific rules concerning failures to register workers correctly. Depending on the infringement, circumstances and number of affected workers, the financial exposure can become material.

For a company with dozens of similarly structured contractor arrangements, the risk can therefore be much greater than the cost associated with one individual.

There may also be claims concerning rights the person would have received as an employee, depending on the circumstances and applicable limitation periods.

Contractor misclassification is therefore not merely a contractual drafting issue.

It can become a payroll, Social Security, HR and employment-law problem simultaneously.

Example of a Genuine Independent Contractor

Consider an international software company that needs a Spanish cybersecurity specialist for a defined four-month security assessment.

The professional operates an established consultancy as an autónomo.

The parties agree the scope of the audit, technical standards, milestones and deadline.

The consultant organises the work independently, uses their own professional resources where appropriate, works with several clients and determines when most of the work is performed.

The client can require security compliance and specify what systems must be tested but does not supervise the consultant’s daily work.

The consultant invoices for the agreed professional service and assumes responsibility for the quality of the deliverables.

This relationship contains several indicators of genuine self-employment.

Example of a Higher-Risk Contractor Arrangement

Consider instead an international company that wants a full-time Marketing Manager in Spain.

The person registers as an autónomo and invoices the company each month.

However, they:

work from 09:00 to 18:00;

report directly to the company’s Marketing Director;

receive daily assignments;

must obtain approval before taking days off;

work exclusively for the company;

manage company employees;

use a permanent internal job title;

participate in employee performance reviews;

and perform an ongoing role with no defined external service or project.

The individual may technically be registered as self-employed.

Operationally, however, the arrangement has multiple characteristics normally associated with employment.

In such circumstances, using a contractor agreement simply because the company does not want to establish Spanish payroll creates significant classification risk.

Remote Work Does Not Automatically Mean Contractor Status

Another common mistake is assuming that a person working remotely must be independent.

Location does not determine status.

A remote professional can still be an employee.

If someone works from their home in Barcelona but follows the employer’s schedule, reports to a line manager, performs a permanent internal role and operates within the company’s organisation, working remotely does not make the relationship autonomous.

Likewise, a contractor can sometimes work from the client’s premises while remaining genuinely independent.

The classification depends on the overall working model.

Working for Only One Company Does Not Automatically Mean Employment

Economic exclusivity should be reviewed but not used as a stand-alone classification test.

A specialist can legitimately spend most of their time serving one large client.

Spain’s TRADE regime explicitly recognises economically dependent self-employed professionals.

But where one-client dependency is combined with fixed working hours, managerial supervision, employee integration and lack of business risk, the overall arrangement becomes more difficult to defend as independent work.

Employers should therefore avoid asking only:

How many clients does this contractor have?

A more useful question is:

Does this person genuinely organise and operate an independent professional activity?

Company Email, Laptop and Meetings Are Not Decisive

Individual operational factors are frequently misunderstood.

A contractor may need:

a company email address to communicate with stakeholders;

a company laptop for security reasons;

access to internal software;

attendance at project meetings;

access to a client’s premises.

None of these automatically creates employment.

However, they can become relevant when combined with deeper organisational integration.

The contractor should still have a recognisably independent role rather than simply being an employee who happens to invoice the business.

The classification should therefore always be assessed cumulatively.

Contractors Should Not Simply Be Employees Without Benefits

This is the central mistake companies should avoid when comparing an employee vs contractor in Spain.

A contractor arrangement is not simply:

employee responsibilities – employee benefits – employer Social Security costs = contractor.

The underlying model must be different.

Employees are part of the organisation.

Contractors provide independent services to the organisation.

That difference should be visible in:

the scope of work;

management structure;

control;

payment arrangements;

working time;

commercial risk;

business organisation;

performance evaluation;

and the way the relationship ends.

If almost everything looks like employment except the invoice, the classification deserves review.

When Hiring an Independent Contractor Makes Sense

Independent contracting can be appropriate where there is a genuine need for external expertise or a defined professional service.

Common examples can include specialist consultants, software architects, independent designers, technical experts, interim project specialists and professional advisers.

The strongest contractor cases generally involve a clear scope or outcome.

A company may engage a consultant to:

design a compensation framework;

conduct a cybersecurity audit;

develop a particular software component;

advise on an acquisition;

produce a market-entry strategy;

or manage a clearly defined transformation project.

In these cases, the organisation is purchasing external professional capability rather than filling a normal internal employee position.

When Employment Is Usually More Appropriate

Employment should be considered when the company expects the person to become part of its ongoing organisation.

This is particularly important where the individual will:

perform a permanent internal role;

work under a company manager;

follow established working hours;

carry out duties assigned continuously by management;

participate in internal employee processes;

have limited financial or operational independence;

or perform essentially the same work as employees in comparable positions.

Trying to convert this type of role into an autónomo arrangement primarily to reduce employment cost or administration may create greater long-term risk.

Employee vs Contractor vs EOR in Spain

For international employers, contractor classification often becomes an issue because the company does not yet have a Spanish legal entity.

The company identifies a strong candidate in Madrid or Barcelona but cannot easily place them on local payroll.

Using an independent contractor may look like the fastest solution.

But lack of a Spanish entity does not transform an employment relationship into independent contracting.

If the person will genuinely work as an autonomous professional, a contractor arrangement may be appropriate.

If the person is expected to function as an employee, the company should consider direct employment through a Spanish entity or an Employer of Record in Spain.

An EOR allows a company to hire an employee in Spain without immediately establishing its own local employing entity. The EOR acts as the legal employer and manages employment administration and payroll while the individual performs their role for the client company.

The commercial decision should therefore follow the intended relationship:

genuine independent professional → contractor

employee-style relationship → direct employment or EOR

This is a more sustainable approach than trying to make every international hire fit into a contractor structure.

How to Reduce Contractor Misclassification Risk in Spain

The strongest compliance process starts before recruitment.

First, classify the role.

Determine whether the company needs a permanent internal team member or an external professional service.

Second, define the scope commercially.

Where independent contracting is appropriate, describe deliverables, responsibilities and outcomes rather than copying an employee job description into a consulting agreement.

Third, examine management practices.

Determine who will control working hours, allocate tasks and supervise delivery.

Fourth, assess integration.

Consider whether the contractor will occupy an internal position or remain recognisably separate from the employee workforce.

Fifth, evaluate business independence.

Review whether the individual has their own professional organisation, commercial risk, infrastructure where relevant and freedom to organise the work.

Sixth, assess economic dependence.

Where the contractor receives at least 75% of relevant income from one client, determine whether the TRADE rules may need to be considered.

Finally, review the arrangement periodically.

Contractor relationships evolve.

A three-month consulting project can become a three-year full-time internal role.

A classification that made sense at the beginning should not automatically be assumed to remain correct indefinitely.

Expert Tip: Audit Working Practices, Not Just Agreements

A professionally drafted independent contractor agreement is useful, but it cannot compensate for contradictory behaviour.

A contract may state that the consultant controls their own schedule.

If the manager requires the consultant to work fixed office hours every day, actual practice tells a different story.

The agreement may say that the contractor independently organises the services.

If every morning begins with a manager assigning individual tasks and supervising how those tasks are completed, the practical relationship may again point elsewhere.

Companies should therefore review both contract language and operational reality.

HR, legal, procurement and hiring managers all need to understand this principle.

Otherwise, HR may create a compliant contractor framework that operational managers unintentionally turn into an employment relationship.

Questions Employers Should Ask Before Engaging a Contractor

Before approving an independent contractor arrangement in Spain, management should be able to answer several questions clearly.

Is the company buying an external service or filling an internal position?

Who decides how the work is organised?

Can the professional determine most of their own schedule?

Is payment linked to a commercial service, project or professional output?

Does the contractor bear meaningful business responsibility?

Does the person operate their own professional activity?

Will they be managed differently from employees?

Are they economically dependent on the company?

Could TRADE requirements apply?

Will the written agreement accurately describe what happens in practice?

If those questions cannot be answered confidently, the engagement should be reviewed before onboarding.

Frequently Asked Questions

What is the difference between an employee and an independent contractor in Spain?

An employee performs paid work within the organisation and direction of an employer.

A self-employed contractor performs professional or economic activity on their own account and outside another person’s organisational direction.

The actual working relationship is more important than the title of the agreement.

What is an autónomo in Spain?

An autónomo is a self-employed individual carrying out economic or professional activity independently.

They generally manage their own business registration, invoicing, taxation and Social Security obligations.

Can a company hire someone as an autónomo instead of an employee?

Yes, where the individual genuinely operates as an independent professional.

A company should not use autónomo status simply to replace an employment contract where the real working relationship remains dependent employment.

What is a falso autónomo?

A falso autónomo is someone formally classified as self-employed despite working under conditions that may actually constitute employment.

The Spanish Labour Inspectorate treats false self-employment as a labour compliance issue.

Can an independent contractor work for only one client in Spain?

Yes.

Working primarily for one client does not automatically create employment.

However, a self-employed professional receiving at least 75% of relevant income from one client may fall within Spain’s TRADE regime if the other statutory conditions are also satisfied.

What is a TRADE in Spain?

TRADE stands for trabajador autónomo económicamente dependiente.

It is a legally recognised category of economically dependent self-employed professional who receives at least 75% of relevant income from one client while still meeting statutory requirements for independent activity.

Does registering as an autónomo prove someone is a contractor?

No.

Registration is an administrative requirement for self-employed activity but does not override the actual nature of the working relationship.

Do contractors receive paid holiday in Spain?

Ordinary independent contractors do not automatically receive employee annual leave rights from their clients.

Employees are entitled to at least 30 calendar days of paid annual leave under the Workers’ Statute. TRADE workers have a separate statutory right to an annual interruption of activity of 18 working days.

Can a foreign company hire an independent contractor in Spain?

In many circumstances, yes.

However, the company should assess worker classification together with tax, permanent establishment, intellectual property, VAT, data protection and immigration considerations where relevant.

Can a contractor be reclassified as an employee in Spain?

Yes.

Where the working relationship has the characteristics of employment, the formal contractor arrangement can be challenged. Authorities may require the worker to be registered under the employee Social Security regime, and additional liabilities may arise.

Is hiring a contractor cheaper than hiring an employee in Spain?

The immediate cost structure may be different because a genuine contractor manages their own business obligations.

However, cost should not determine classification.

An incorrectly classified contractor can expose the business to significantly greater compliance costs later.

Is an Employer of Record better than a contractor in Spain?

The models address different situations.

A contractor is suitable where the professional is genuinely self-employed.

An Employer of Record in Spain may be more appropriate where the person should work as an employee but the foreign company does not have its own Spanish employing entity.

Conclusion

The employee vs contractor Spain decision is not primarily about what contract the company prefers.

It is about the relationship the business actually intends to create.

A genuine independent contractor should operate with meaningful professional autonomy, organise their own activity and assume characteristics of operating a business on their own account.

An employee works within the organisation and direction of an employer and receives the protections associated with Spanish employment law.

Between those categories, Spain also recognises economically dependent self-employed professionals through the TRADE regime — but economic dependence should not be confused with employee-style organisational dependence.

For international employers, the most important rule is straightforward:

classify the relationship first and choose the contract second.

If the business genuinely needs an external specialist, independent contracting can provide useful flexibility.

If the company wants a permanent team member working under its direction, employment is likely to provide a more appropriate structure.

And where a foreign business wants to hire an employee in Spain without establishing a local entity, an Employer of Record in Spain can provide an alternative to incorrectly forcing an employment relationship into an autónomo arrangement.

How Brain Source International Can Support Hiring in Spain

Brain Source International supports international companies building teams in Spain through recruitment, Employer of Record, payroll and workforce consulting services.

For businesses deciding between an employee vs contractor in Spain, the first step is understanding how the individual will actually work.

We can support companies with recruitment in Spain, help structure international workforce expansion and provide Employer of Record in Spain solutions where the company wants to employ local talent without establishing its own entity immediately.

For organisations already operating in Spain, our broader workforce support can also help connect recruitment decisions with payroll, employment administration and long-term workforce planning.

The objective is not simply to select the fastest hiring model.

It is to create a workforce structure that supports business expansion while reducing avoidable employment classification risk.

Planning to hire employees or independent professionals in Spain? Contact Brain Source International to discuss the workforce model that best fits your expansion strategy.

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Employee vs contractor Spain and independent contractor classification

Infographic idea:
“Employee or Contractor in Spain?”

Use a decision flow:

Works within employer organisation → company controls work → limited business risk → employee indicators

versus:

Own organisation → controls service delivery → assumes commercial risk → independent contractor indicators

A second useful graphic could explain:

Employee → Autónomo → TRADE → False Autónomo

with a short explanation of what separates each status.

Recommended Schema.org

Use:

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The FAQ section is particularly suitable for search features and AI-generated search answers because it addresses direct employer questions around autónomo, TRADE and contractor reclassification.