In a statement, police said most of those smuggled had entered on tourist visas, including for other countries within the European Union's Schengen area.
Spanish police said on Thursday they had broken up a criminal network linked to smuggling 300 workers into the country, mostly from Nepal.
The workers were placed illegally on farms in central and eastern Spain.
Police arrested 11 people and are investigating two others. A total of 322 people, most from Nepal, were among the victims.
Of those, 294 lacked proper documentation to live and work in Spain.
In a statement, police said most of those smuggled had entered on tourist visas, including for other countries within the European Union's Schengen area, which is made up of 25 of the 27 EU member countries, plus Liechtenstein, Iceland, Norway and Switzerland.
Once in Spain, the workers were recruited and moved to various parts of the country, where their labour rights were denied, police said.
In a video released by Spanish police, scores of people sat side-by-side on mattresses lined up in a low-lit room.
Police said the criminal network arranged for the victims' accommodation in Albacete, in south east Spain.
They were crammed into rooms with poor ventilation and limited access to bathrooms in "living conditions that were completely undignified and inhumane," police said.
From that location, they were allegedly transported on a daily basis to farms. The trips were made in vans, some of which didn't meet safety standards, police said, adding that on one occasion a Nepalese national died in a traffic accident.
Police allege that in many cases the victims employed by the criminal network didn't receive pay for months of work, besides being provided very basic meals.
According to the World Bank, over 20% of Nepal's 30 million people live in poverty.