Spain's Labour Inspectorate Algorithm — Automated Detection of Contract and Overtime Fraud

Since a 2018-2019 nationwide campaign, Spain's Inspección de Trabajo y Seguridad Social (ITSS) has used data-crossing software — comparing billing volume, payroll size and contract types across tax and social security records — to flag employers likely to be misusing temporary, part-time or 'fijo-discontinuo' (fixed-discontinuous) contracts, or under-paying overtime. Flagged employers first receive a warning letter; those that do not self-correct face inspection and sanction.

In its first year, the 2018 campaign converted 193,946 temporary workers to permanent contracts, more than double the 92,925 conversions recorded in 2017, with two-thirds of employers regularising voluntarily after a letter alone. A January 2021 reform of the LISOS sanctions law extended the model, allowing inspectors to issue some infraction records from automated data-crossing without a site visit. By 2022, a related campaign against unpaid overtime logged 32,644 inspections, 11,070 infractions — more than double the 2019 total — and €13.7 million in sanctions. In Catalonia, the regional inspectorate applied the same big-data approach in 2025-2026 and flagged fraud indicators in 4,100 contracts across 2,500 companies, more than half involving misuse of fixed-discontinuous contracts.

The inspectors' own union, SITSS, has publicly warned that automating infraction records risks replacing inspectors' direct judgement with insufficient legal guarantees, and legal commentators have compared the model's opacity risk to the Netherlands' SyRI fraud-detection system, which courts annulled in 2020 for violating privacy and due-process rights. Spain has not published the algorithm's scoring criteria.

Read the full analysis: https://www.eldiario.es/economia/pasa-si-inspector-trabajo-robot-avances-temores-sanciones-automatizadas-aprobado-gobierno_1_7177360.html