The Spanish arms of the Big Four accounting firms have been hit by surprise inspections following a spate of bad publicity over employees having to work at least 12 hours a day.
Spain’s labour ministry said on Monday that the Madrid offices of PwC, KPMG, EY and Deloitte had received visits from government inspectors in November as part of an investigation into potentially abusive practices.
The ministry said its “main objective is to check whether there are any overtime hours for which employees have not been paid or received subsequent time off”, noting it was concerned about compliance with both labour and social security law. Yolanda Díaz, labour minister and one of Spain’s deputy prime ministers, said: “The excesses and abuses of overtime hours are being investigated and the mandate is clear ... No big company, no matter how big, is beyond the law.”
The Big Four’s towering headquarters loom over the Madrid skyline and between them they employ more than 20,000 people across Spain, where they are magnets for many graduates.
Similar to international investment banks or corporate law firms, working hours can be punishing, particularly during busy periods of corporate dealmaking or the annual audit season for listed companies.
At EY’s Barcelona office in 2021 a group of junior auditors complained to bosses in an email that they were having to work an “unsustainable” 84 hours a week.
One senior executive at a foreign bank in Madrid who interacts regularly with the Big Four said work there was “a few notches below investment banking” in terms of prestige and salary, but not significantly less arduous. “They work very hard but make a fraction of what you make in banking.” The executive said a junior analyst in investment banking in Spain could earn €100,000 per year. By contrast, in the Big Four’s legal services divisions – a big part of their Spanish operations – trainees earn less than €14,000 a year and junior staff just under €35,000, according to research by the IE Law School and Signium, an executive search firm.
Many young people join the firms to gain experience and win their formal accounting qualifications before moving into other sectors. In Spain, the Big Four’s global working practices intersect with the stubborn traditions of a local working culture where corporate executives say presenteeism is still sometimes prized over productivity.
The four firms generate combined annual revenues of more than €700 million in Spain. Díaz, a member of the communist party, has made monitoring working hours a priority since a 2019 law introduced new requirements for the start and end times of workers’ days to be recorded. Last year it identified more than 11,000 infringements affecting nearly 113,000 workers and imposed penalties totalling almost €14 million.
EY, KPMG and Deloitte declined to comment on the labour ministry inspections. PwC did not respond to a request for comment.
Senior staff at Big Four firms say it is inevitable that their client-driven workload comes in peaks and troughs – particularly in the audit division – but that over the course of a year it balances out. – Copyright The Financial Times Limited 2023
