Increase in the minimum wage to €900 per month

The Official State Gazette (BOE) published on December 27 the increase of the Minimum Interprofessional Wage (SMI) to €900 gross per month in 14 payments. This measure will come into force in January 2019, representing a 22.3% increase compared to the 2018 SMI (€735.90).

This new SMI will affect both permanent and temporary workers, as well as domestic employees. For part-time workers, the SMI will be prorated according to the actual hours worked. Only cash remuneration will be computed; payment in kind may not, under any circumstances, reduce the total amount.

However, it is important to note that the SMI will not affect the structure or amount of salaries already received by workers when such salaries, in their entirety and on an annual basis, are higher than the minimum wage. Therefore, if a worker’s total annual salary already reaches €900 per month (in annual terms), it will not be affected by the SMI increase.

In light of the above, salary increases will only be required when, taking into account base salary and supplements, the total annual salary does not reach €900 per month (i.e., €12,600 per year). Thus, to verify compliance with the minimum established by the Royal Decree, it is necessary to: (i) take into account wage supplements under Article 26.3 of the Workers’ Statute (“salary supplements set according to circumstances relating to the worker’s personal conditions, the work performed, or the situation and results of the company”), and (ii) calculate the amount on an annual basis, not monthly.

Therefore, the SMI amounts for 2019 will be as follows:

• Daily SMI: €30

• Monthly SMI: €900

• Annual SMI: €12,600

• Hourly SMI for domestic employees: €7.04