Increase in the Minimum Wage to 900€ per month

By 4 January, 2019 No Comments

The Official State Gazette (BOE) published on December 27 the increase of the gross Minimum Interprofessional Wage (SMI) to 900 euros in 14 monthly payments. This measure will come into effect in January 2019, assuming an increase of 22.3% with respect to the 2018 SMI (€ 735.90).

The new SMI will affect both permanent and temporary workers, as well as domestic employees. For workers with part-time shifts, the SMI will be prorated based on number of working hours.

The change will only affect the liquid compensation, and the salary in kind will not, under no circumstances, reduce the total amount.

However, it is important to bear in mind that the new SMI will not affect the structure or the amount perceived by the workers whose annual salaries are higher than said minimum wage. Therefore, if the total calculation of a worker’s salary currently reaches the amount of 900 euros, it will not be affected by the increase of the SMI.

Considering the above, the pay increase will proceed when, taking into consideration base salary and supplements, the wage does not reach 900 euros in annual computation. Thus, if you wish to know if your wage reaches the minimum wage established by the Royal Decree, you will have to: (i) take into account the salary supplements in the terms of article 26.3 of the Workers’ Statute (“fixed supplements according to relative circumstances to your personal conditions, the work performed, or the situation and results of the company”) and (ii) performing the calculation in annual terms and not in a monthly basis.

Finally, the amounts of the SMI for the year 2019 will be the following:

Daily SMI: 30 euros

Monthly SMI: 900 euros

Annual SMI: 12,600 euros

SMI per hour for domestic employees: 7.04 euros