What are the implications for your company of the new 8% increase in the SMI to €1.080?

At the beginning of February, it was announced that the Minimum Interprofessional Wage (SMI) would rise by 8% to €1,080 per month for a full-time worker. With just a week to go before the Council of Ministers, which is expected to approve the Royal Decree regulating the minimum wage for 2023, the minimum wage is expected to rise to €1,080 per month for a full-time worker.

What does this 1.080 euros per month refer to?

The €1080 per month constitutes the gross SMI corresponding to 14 payments for a full working day of, in the absence of an agreement or collective agreement, a maximum of 40 hours per week, distributed proportionally in part-time contracts.

In the event that the salary is distributed in 12 payments and the extra payments are prorated, the SMI will be €1,260 gross/month, an amount that will foreseeably correspond to the minimum contribution base for common contingencies in 2023.

Based on the ordinary salary distribution of 14 payments, the 8% increase in the SMI places the minimum amount to be paid to workers as follows:

MINIMUM INTERPROFESSIONAL WAGE 2023
Daily SMI	Monthly MMI	Annual SMI
36,00 €	1.080,00 €	15.120,00 €

Do I have to raise the wages of other workers?

The company will NOT have to increase the salary amount of its employees when it is already above this €1,080 gross per month or its equivalent.

We must also remember that the increase in the SMI will only affect workers whose total remuneration is below €1,080/month or equivalent. As we said at the time, when in 2019 the Minimum Interprofessional Wage was increased from 735.90 €/month to 900.00 €/month, in fourteen payments, the basic salary should not be confused with the minimum wage, as the Supreme Court admits that the company may group other salary increases together with the basic salary.

In short, workers with a basic salary of less than €1,080, but which added to other increases exceeds this amount, will not be subject to the increase in the SMI. Notwithstanding the above, the usual channels for regulating wages and wage increases are collective bargaining, collective agreements and agreements between companies and workers, with the SMI acting as the minimum limit below which it is not possible to contract.

How does the increase in the minimum wage affect the garnishment of a worker’s wages?

The first thing that must be clear, both for employees and companies, is that, if it is necessary to garnish wages, this will be done on the basis of the amount received, to which certain percentages are applied by brackets, starting from the Minimum Interprofessional Wage.

In this way, in the event of a garnishment applicable to a worker’s salary, the company must take into account that the amount that cannot be garnished has increased by 8% before notifying the actual garnishment of the worker’s salary.

In conclusion

• We are talking about a new SMI of €1,080 gross: before taxes and social security contributions. In 14 payments and applicable to a full-time worker.
• The 8% increase will take place on 1 January 2023. This means that gross salaries of less than 1,080 euros or its equivalent per working day or salary distribution, which have not been increased to reach this SMI in the January payroll, will have to be compensated afterwards.
• The increase will only affect workers who are below the new SMI, counting all the wage concepts that they are entitled to receive or that they actually receive.

Cualquier duda que les surgen respecto a este tema no duden en dirigirse a nosotros, telefónicamente a Isabel Torre Carazo o a su e mail itc@btsasociados.com, estaremos encantados en atenderles.