Trade unions will lead protests across Spain on Thursday in an effort to force an agreement between the government and the business sector over a reduction in working hours amid pushback from employers concerned about a rise in costs.

Prime Minister Pedro Sanchez’s Socialists are seeking to persuade businesses to buy into a plan to reduce the working week by 2.5 hours from 40 hours that they say will boost productivity.

The European Union must close the productivity gap between its member states to keep pace with economic rivals the United States and China, former European Central Bank chief Mario Draghi said in a report this month produced for the European Commission.

To secure the backing of employers, the government has offered a hiring bonus for small businesses with less than 10 employees to offset the reduction in working hours while maintaining the same level of service, according to a source involved in the negotiations.

Madrid can approve the reduction without consensus and a senior government source said they will do so before the end of 2024.

The offer calculates the working week on an annual basis, so workers in sectors where it is difficult to adapt shifts such as hospitality can accrue hours that can later be compensated for in the form of holidays.

Spaniards work more hours than most Europeans. According to Eurostat, the average working week in Spain was 36.4 hours in 2023, compared to the European Union average of 36.1 hours.

Labour Minister Yolanda Diaz has said that reducing working hours will increase productivity, an area where Spain has traditionally lagged behind its European counterparts.

Business owners fear the proposal will mean employees work fewer hours for the same pay as before.

The impact of similar measures in other countries is unclear.

France in 2000 introduced a 35-hour work week expecting it would create hundreds of thousands of jobs. But data shows an increase in the cost of labour, making French workers more expensive in relative terms and companies less competitive.