Glovo said it would appeal the decision, in which the labour ministry alleged it had failed to contribute to social security and make other payments from 2018 to 2021 as it did not hire its delivery riders under formal contracts.
"(Glovo) has violated fundamental labour rights and they have obstructed the work of the investigation. For this reason, action has been taken against this company," Diaz told reporters, adding "We will make them comply with the law".
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Glovo said that it had fully collaborated with the labour ministry investigation, which it said took place before a new law came into force.
"During the inspection period, Glovo asked to expand and provide its evidence, reflections and assessments as well as different documentation, which was rejected by the labour inspection," it said in a statement.
In May 2021, Spain passed one of Europe's first laws relating to gig-economy workers' rights, requiring riders for food delivery platforms be made employees on formal labour contracts. This came into effect in August that year.
But some, such as 19-year-old Glovo rider Giancarlo from Peru, said they have still not been offered a formal contract.
"I would prefer to work for a salary, it's easier than having to look (for orders) for myself alone," Giancarlo told Reuters in Barcelona. He preferred not to give his last name as his residence permit in Spain is still pending regularisation.
However, Nicolli, a 22-year-old Brazilian rider in Barcelona, said she preferred freelancing because it "gives more freedom to work and earn a lot more".
The labour ministry said that Glovo had refused to give labour contracts to more than 10,600 riders in Spain's second and third-largest cities, Barcelona and Valencia, since the riders law came into effect.
One of the unions representing the riders, CCOO, said in a statement it "valued positively the strong action taken against the problem of the delivery workers".