The Ministry of Employment was created in the government of
Eduardo Dato on May 8, 1920.
 It had previously existed Institute of Social Reforms (1903, heir of the Social Reform Commission, 1883) and the National Institute of Foresight (1908), which were integrated into the new Department. It also obtained the powers of the newly disappeared Ministry of Supply (1918-1920). It was also included in the structure of the ministry the Bureau of Labor of the Directorate General of Trade, Industry and Labor, the Emigration Council and the Board of Engineers and Pensioners Abroad.
 The functions of the Labor Inspectorate (1906), were also given to the new ministry.
Second Republic, the Minister
Francisco Largo Caballero was issued the Decree about Workers Associations, through which these entities passed to the jurisdiction of the Ministry of Labor from the Governation Ministry.
Under the Franco dictatorship and the suppression of freedom of association, demonstration and strike as well as collective bargaining, the Ministry, without prejudice to the work of the Vertical Union, expanded its capacity for action, establishing up to the detail of working conditions.
After the restoration of democracy, Social Security competences passed in 1977 to the newly created
Ministry of Health, although Employment Ministry recovered them in 1981. In 1978 the National Employment Institute was created. Later, the creation in 1988 of the Ministry of Social Affairs meant the loss of social policies. Nevertheless, both Departments merged in 1996, after the electoral victory of the
Popular Party, assigning itself for the first time the organisms Institute of the Woman and Institute of the Youth.
In 2004, with
José Luis Rodríguez Zapatero as President of the Government, the Ministry of Employment assumes the immigration powers that until now resided in the
Ministry of the Interior. In terms of social policies, in 2008 they were distributed between the
Ministry of Education and the newly created Ministry of Equality (Now ministry of Health and Ministry of Equality have been merged).
In the X Legislature, from December 22, 2011, the Ministry is renamed Employment and Social Security, while retaining the same competencies.