Spain: Minimum Wage, Social Security Contribution Limits Raised

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By Brett Allan King

Dec. 7—Spain's minimum wage will increase by 8 percent to 707.60 euros ($761) in 2017 and social security contributions by 3 percent under Royal Decree-law 3/2016, published Dec. 3

“The government deems it desirable to increase the minimum interprofessional salary in light of improved general economic conditions,” according to the decree-law, which adds that “the evolution of wages in the employment recovery process” must accompany the “balanced” encouragement of competitiveness.

Social Tax Limits Raised

Royal Decree-law 3/2016 also raises the minimum income subject to social security contributions from 1,067.40 euros ($1,148) monthly to 1,152.80 euros ($1,240) and raises the maximum from 3,642 euros ($3,916) to 3,751.26 euros ($4,034).

According to treasury minister Cristóbal Montoro, the government would be open to eliminating the upper limit on Social Security contributions as “part of a program undertaken within the Toledo Pact, where we would talk about the removal of the ceiling on social contributions and, obviously, its reflection on relative pensions.”

The Toledo Pact was a 1995 overhaul of the social security system, which is monitored by a permanent parliamentary commission.

Unions: Not Enough

Spain's largest labor unions, the General Union of Workers and the Workers' Commissions, called for raising the minimum wage to 800 euros ($860) in 2017 and 1,000 euros ($1,075) in 2020 to make up for lost earning power. In a Nov. 28 report, the unions said the current minimum wage is just above the poverty line and could leave some working families below the line.

The Spanish Confederation of Employers and Industries did not immediately respond to a request for comment.

The text of Royal Decree-law 3/2016 is available here, the labor union response here, both in Spanish.

To contact the reporter on this story: Brett Allan King in Madrid at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

For more information on Spanish HR law and regulation, see the Spain primer.

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