Economy If the minimum wage goes up, do all salaries go up?

The minimum interprofessional salary (SMI) has risen by 8% in 2023

Economy If the minimum wage goes up, do all salaries go up?

The minimum interprofessional salary (SMI) has risen by 8% in 2023. The salary thus goes from 1,000 euros to 1,080 euros gross in 14 payments (15,120 euros per year). The Government approved the increase on February 14, entering into force retroactively from January 1. Since Pedro Sánchez arrived in Moncloa, this indicator has accumulated a rise of 46.7%.

Since the SMI increase was known, many Spanish workers have asked themselves the same question: If the minimum wage goes up, will all salaries go up?

It should be remembered that the interprofessional minimum wage is the minimum remuneration amount (now set at 1,080 euros) that a worker receives for the legal working day, regardless of the type of contract they have or whether they are entitled to extra payments or they are prorated.

According to calculations by the unions based on the Active Population Survey (EPA), the 2023 SMI will benefit between 2.3 and 2.5 million workers in Spain, with special incidence among women, young people and employees in sectors like the agricultural

However, the SMI only affects those people for whose work they receive an income less than that established by law, that is, those who earn less than 15,120 euros per year and have full-time contracts. For temporary contracts, it is necessary to make the proportional calculation.

Also keep in mind that minimum wage is not the same as base salary. A salary is made up of the base salary, which is the remuneration set per unit of time or work, and supplements such as seniority, extra payments, company results or bonuses, among others. Thus, a worker who has a base salary of 1,080 euros will not be affected by the increase approved by the Government, since said figure is higher when adding the salary supplements.

The salary structure is established through collective bargaining or, failing that, the individual contract. In this sense, article 27 of the Workers' Statute establishes that "the revision of the interprofessional minimum wage will not affect the structure or amount of professional salaries when these, as a whole and annual calculation, are higher than that".

INTERPROFESSIONAL MINIMUM WAGE

1. The Government will set, after consultation with the most representative trade union organizations and business associations, annually, the interprofessional minimum wage, taking into account:

a) The consumer price index.

b) The average national productivity achieved.

c) The increase in labor participation in national income.

d) The general economic situation.

Likewise, a semi-annual review will be established in the event that the forecasts on the aforementioned price index are not met.

The review of the minimum interprofessional salary will not affect the structure or the amount of professional salaries when these, as a whole and annual calculation, are higher than that.

2. The minimum interprofessional salary, in its amount, is unattachable.

In summary: the increase in the minimum wage benefits workers whose employment relationship is not governed by an applicable collective agreement and whose annual calculation is less than those established in the SMI, that is, when their income is less than 15,120 euros per year. The 8% increase also affects the beneficiaries of unemployment benefits from the Public State Employment Service (SEPE).

However, the 1,080 euros is not the amount that SMI workers enter on their payroll, since taxes and Social Security must be deducted.

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