Three million workers in Spain and the employers who pay their salaries will need a few more weeks to learn how much their pay will rise next year through the interprofessional minimum wage (SMI). With a stalled social dialogue and unions deeming the offered 4 percent increase insufficient, the government has postponed its final decision until January.
Information from sources within the Ministry of Labor confirms that the last Cabinet meeting of 2023 will not approve any decree on the SMI this Wednesday. Starting January 1, the SMI will remain at 1,080 euros gross, paid in 14 installments. Internal disagreements within the administration are complicating consensus on any revaluation that has not yet received the backing of social actors.
Employers, supported by the lobby groups, have urged the government to offset the rise in the minimum wage in public contracts, since in some cases this salary is common and a 4 percent increase would drive up costs noticeably. The draft law needed to implement the contract framework remains unchanged.
The Labor Ministry has signaled its plan to conduct targeted reviews of public contracts most affected, though the responsibility for funding these adjustments lies with the Treasury. A headline from a recent briefing quoted Maria Jesus Montero saying, “The SMI increase should not come at the expense of wider economic inclusion.” The ministry clarified that Montero was addressing a generalized de-indexing of public contracts and proposing specific, not universal, reviews. Yet negotiations remain blocked and no new talks with employers and unions are scheduled to finalize the figure.
It remains to be seen whether a retroactive “paguilla” is needed
For this reason, the final decision on the minimum wage has been pushed to January at the earliest. The Labor Ministry intends to publish a royal decree with retroactive effects following the established approach used in prior years when a formal agreement could not be reached. The Official State Bulletin (BOE) is expected to reflect December 31 as the operative date.
Depending on the timing of the final decision, companies that pay the minimum wage to their workers (roughly three million across Spain and about 250,000 in Catalonia alone) may be able to include the revaluation in the January payroll, or they may rely on a February payment and issue a compensatory “paguilla” for the delay in that month.
Professions where the minimum wage is common or standard include domestic workers, agricultural workers, delivery drivers, and chambermaids.
Complex negotiations
Over the past five years, the government has often delayed the SMI revaluation past December 31 of the prior year. The last time such a move occurred was in 2018, when the PSOE administration approved the SMI increase at a specially convened Council of Ministers in Barcelona.
Since then, for various reasons, revaluations have occurred in January, as last year, or even in February. That timing shift has raised the base salary by almost 50% and made consensus with employers and unions harder to achieve. This has amplified discord within the coalition and slowed BOE implementation. Tensions between the First Vice President and the President for Economic Affairs, Nadia Calviño, and the second vice-president and leader of the Labor Party, Yolanda Díaz, have become more persistent in recent years.