Can I hire someone only with a freelance contract?

What you need to know before hiring your first collaborator

When a startup starts growing, the first impulse is usually to hire help in a flexible and cheap way. And it's common to think: "I'll make them a freelance contract, so I don't have to hire them on payroll or pay Social Security". Very common mistake... and very risky.

In this article we explain when you can hire with a freelance and when, even if you use that contract, you will be incurring in a disguised employment relationship. That is: a false self-employed person.

What is really a freelance?

A freelance is an independent professional who provides services on their own account, with organizational autonomy and without being integrated into the client's structure. In Spain, they are normally registered as self-employed or through a single-person company.

Hiring a freelance doesn't mean signing a contract "off payroll" and that's it. For the contract to be valid, certain legal conditions must be met that distinguish it from an employment relationship. And this is where many startups make big mistakes.

When does a freelance become a disguised worker?

The law is not based on the name of the contract, but on how the relationship behaves in practice. The key lies in these 4 elements that characterize an employment relationship according to the Workers' Statute:

1. Dependence

Does the person follow your instructions, schedules, or is integrated into your team as if they were one more? Then they are a worker, not a freelance.

2. Alienation

Do you (company) assume the business risk, and the person gets paid regardless of how things turn out? That indicates an employment relationship.

3. Fixed periodic remuneration

Do you pay a fixed amount each month, without variation, and without linking it to the result? Another indication of employment.

4. Personal nature of the provision

Can only that person do the work, and cannot freely delegate or subcontract it? It's another sign that we're dealing with an employee.

If these elements are present, it doesn't matter how you've titled the contract: if there's an inspection or the freelance sues claiming employment status, the relationship will be considered employment. And the consequences can be VERY SERIOUS.

What happens if I hire as freelance someone who should be a worker?

The Labor Inspectorate can:

• Claim unpaid Social Security contributions retroactively (up to 4 years).
• Impose fines of up to €10,000 for each worker in fraud.
• Consider the contract null and demand immediate registration as a worker.
• Initiate proceedings for use of "false self-employed", especially monitored in digital sectors.

Additionally, if there's dismissal, the freelance could sue judicially as if they were a worker: compensation, unused vacation, salary differences, etc.

When can you safely use a freelance contract?

Using a service provision contract with a freelance is completely legal if:

• The person provides services to several clients, not just you.
• They have their own structure (tools, software, agenda).
• They choose their schedules and way of working, without hierarchical supervision.
• The work result is punctual or project-based.
• They can delegate, subcontract, or reject assignments.

In these cases, it's ideal to document everything in a well-drafted service provision contract, with:

• Clear object of the assignment.
• Limited duration and scope.
• Billing by milestones or deliverables preferably.
• Absence of exclusivity or time control.

And exclude any element that could imply a disguised employment relationship in the contract.

Do you need help with this topic?

From Legal Core Labs we can help you:

• Review freelance contracts to avoid risks.
• Draft service contracts that respect legality.
• Analyze if a collaboration fits as an employment or commercial relationship.
• Define the safest model to hire talent in your startup.

Avoid mistakes that can be expensive. We advise you so you can grow with legal security and without surprises.