The Government of Spain raises the Minimum Interprofessional Wage to 1,000 euros

Moncloa Palace, Madrid

The Council of Ministers has approved the increase in the Interprofessional Minimum Wage to 1,000 euros, in fourteen payments, following the agreement reached this month with the trade unions CCOO and UGT.

The increase, effective from 1 January, means that the minimum wage for any activity is set at 33.33 euros per day across the board; domestic workers must receive a minimum of 7.82 euros gross for each hour worked and 47.36 euros gross for the legal working day.

Foto: Pool Moncloa/Borja Puig de la BellacasaThe Minister of Territorial Policy and spokesperson of the Executive, Isabel Rodríguez, has highlighted that since Pedro Sánchez has been President of the Government of Spain, the Minimum Interprofessional Wage has increased by 33.5%, from 735 euros to 1,000 euros. In his view, the measure will have an impact on the welfare of workers, especially younger workers and women.

For her part, the Second Vice-President of the Government of Spain and Minister for Work and Social Economy, Yolanda Díaz, added that the wage improvement brings Spain closer to the gates of Europe: "The aim is to become more European and to remove an entirely precarious business and labour relations model.

In his opinion, the minimum wage "is starting to be decent", although we need to start talking about raising wages in general: "If wages improve, the economy as a whole improves. This means reversing precariousness and low wages".

Furthermore, she has argued that this does not have a negative impact on employment in certain sectors. The self-employed sector registered 105,000 more workers; the agricultural sector 58,000 more; and the domestic workers sector remained stable.

Yolanda Díaz stated that the Minimum Interprofessional Wage is the best tool for combating in-work poverty and for wage equality between men and women.

Progress towards pay equity

Foto: Pool Moncloa/Borja Puig de la BellacasaOn the occasion of Equal Pay Day, commemorated today, the Government has approved an Institutional Declaration that warns about the gender gap: the percentage of women with incomes below the minimum wage is 25.7%, compared to 11.1% of men in the same situation.

The text includes the commitment of the Executive to stable and quality employment, permanent contracts and the fair distribution of care, as well as to the regulations already adopted to advance in this field, such as the Equal Pay Act, the Co-Responsibilities Plan and the labour reform.

The government spokesperson pointed out that the wage gap stands at 16.2% after a reduction of five points in the last four years. The Second Vice-President announced that in the coming days a public tool will be made available to companies to register equal pay.

Extension of certain social protection measures

The Council of Ministers has approved the Royal Decree-Law adopting urgent measures for the protection of self-employed workers, for the transition towards structural mechanisms to defend employment and for the economic and social recovery of the island of La Palma. In addition, certain measures to address situations of social and economic vulnerability have been extended.

Extension of the ERTE COVID

The government has agreed to extend the Temporary Redundancy Programmes approved during the pandemic (ERTE COVID) to protect workers' income and the productive fabric until 31 March 2022. The measure will facilitate the transition to the structural ERTEs foreseen in the labour reform.

The Second Vice-President specified that the social protection measures for the Culture sector will be extended until 30 June 2022, as will those included in the MECUIDA Plan to help families balance work and family life during the health emergency.

Foto: Pool Moncloa/Borja Puig de la BellacasaThe Minister for Inclusion, Social Security and Migration, José Luis Escrivá, stressed that the jobs lost during the pandemic have been recovered and 500,000 additional jobs have been created.

The number of workers on ERTE stands at 0.6 % of the total number of workers and half of them are working part-time. From a sectoral perspective, the percentage of workers still on ERTE is less than 10% in all sectors except travel agencies, where it stands at 29%.

The minister pointed out that in view of these data, a new period is opening up in which the labour reform in force since 1 January will allow those workers and companies that still need it to continue to be protected.

The labour reform, according to the minister, includes the sectoral RED mechanism, which exempts companies from 40% of Social Security contributions if workers are being trained for the transition to another job or sector. Escrivá stressed that this mechanism will particularly benefit travel agency employees.

At the company level, the text includes ERTE due to force majeure, with an exemption of up to 90%, and ERTE due to economic, technical, organisational or production causes (ETOP), with an exemption of 20%.

Escrivá stressed the importance of training workers during the period in which they are on ERTE to improve their qualifications and their ability to remain in the labour market. More than 31,000 workers, 41% of those eligible, are currently covered by training schemes.

In addition, he stressed that over the next month, companies, workers and the administration will have time to adapt to the new mechanisms introduced by the labour reform.

Protection for the self-employed

José Luis Escrivá also emphasised that protection for the self-employed due to the suspension of activity has been maintained, with a benefit of 70% of the minimum contribution bases and exemption from contributions. Beneficiaries may not exceed 1.25 times the Minimum Interprofessional Wage.

The rest of the self-employed who are under protection will be adjusted to the usual level of social security contributions in an orderly and gradual fashion over a period of four months.

Support for the recovery of La Palma

The minister said that the deferral and moratorium on the payment of social security contributions for those affected by the eruption on the island of La Palma will also be extended for four months.

Collective employment plans

The Council of Ministers has agreed to submit to Parliament the Draft Law on the Regulation for the Promotion of Employment Pension Plans, which was presented last 23 November.

This instrument is included in the Recovery, Transformation and Resilience Plan, forms part of the reform and modernisation of the pension system and responds to the recommendations of the Toledo Pact.

The regulation aims to facilitate access to low-fee savings mechanisms for low and middle-income earners, small and medium-sized enterprises, and the self-employed and young people.

The minister specified that adjustments have been made with respect to the previous draft, so the self-employed will now be able to deduct up to 5,750 euros per year. Employees will be able to add their contributions to those made by their employer to benefit from income tax exemptions. The Bill also incorporates incentives for companies, so that their contributions to the pension plan will not be subject to social security contributions, with a limit of 115 euros per month per worker (1,380 euros per year), representing a saving of almost 400 euros per worker.

Meritorious Workplace Awards

Also in the field of labour, the Executive has approved the Regulation of the Medal and Plaque for Merit for Work.

The Second Vice-President announced that the concepts valued and awarded by the government will be modernised. In this regard, the awards will be given to values such as excellence, gender equality and occupational health.

Yolanda Díaz also pointed out that medals may be withdrawn when the decorated entity or person has failed to meet the required exemplary standards or has been subject to some kind of administrative sanction or criminal conviction. They will likewise be withdrawn should the beneficiaries have a record of or display conduct manifestly incompatible with democratic values.

Advance notice of the call for applications for scholarships

The Council of Ministers has regulated the call for grants and study aids 2022-2023, which will have an investment of 2,134 million euros.

Foto: Pool Moncloa/Borja Puig de la BellacasaThe spokesperson of the Executive highlighted that the budget in this area has increased by 45% and the number of beneficiaries by 26% since the 2017-2018 call for applications, and that the aid will reach 200,000 more students than four years ago.

As Isabel Rodríguez explained, the most important new feature is that the application and notification deadlines for grants have been brought forward, which will allow students to find out before the enrolment period whether they meet the financial requirements to receive these grants.

Regarding university studies, the grade required to obtain a scholarship for a non-qualifying Master's degree has been reduced, with an average mark of five points (down from seven) now sufficient.

Since 2018, the Government has been working on a scholarship policy to ensure that no student drops out of post-compulsory education for financial reasons, thus ensuring social cohesion, equity and equal opportunities.

Non official translation