Unions Demand Tax Exemption for Updated Minimum Wage and Push for €1,200 Threshold
Dialogue intensifies as Spain’s government submits a proposal to raise the minimum wage amidst differing demands from unions and employers.
On Wednesday, Spain’s Ministry of Labor formally proposed an increase to the minimum interprofessional wage (SMI), suggesting an uplift of €50 in 2025—from the current €1,134 to €1,184 per month, across 14 payments.
This constitutes a 4.4% rise and aligns with recommendations from labor experts relayed during the proposal's introduction.
However, unions have rejected the governmental proposition, advocating instead for a minimum wage hike to approximately €1,200 this year, which represents around a 5.8% increase.
Meanwhile, employers have received the governmental proposition and are set to deliberate on the proposal within their leadership bodies on January 22nd.
The Ministry of Labor plans to reconvene the social dialogue shortly thereafter to conclude negotiations.
Joaquín Pérez Rey, Secretary of State for Labor, expressed that the government maintains a 'flexible' stance, open to revising the proposal to reach an accord with social partners.
Nonetheless, a tripartite agreement appears unlikely given the existing landscape; employers are firmly opposed to even a 4.4% increase deeming it excessive, while unions argue that such an increment falls short of fulfilling the European Social Charter's mandate that the minimum wage should correspond to 60% of the average net wage.
The unions' refusal also touches on the possibility, as suggested by experts, that this year, unlike previous years, the Treasury may not elevate the minimum income exemption to match the new minimum wage.
UGT union had stated last Friday that they would not agree to a wage increase deal without incorporating this exemption.
Fernando Luján, UGT’s Deputy Secretary for Union Policy, highlighted that tax exemption for the agreed amount is essential for fiscal equity.
CCOO, focusing on increasing the minimum wage by 5-6% to the €1,200 mark, contends that reaching this amount would satisfy the 60% of the average wage requirement, irrespective of adjustments in taxable minimums by the Treasury.
While there is a difference in focus, union leaders insisted that it won't disrupt their joint strategy.
They’ve demanded the Ministry of Labor engage with the Treasury to resolve the taxation issue before the January 22nd negotiation.
Maricruz Vicente, CCOO’s Secretary of Trade Action, emphasized the need for thorough government representation at the table.
Pérez Rey noted that labor is not responsible for setting wage-related fiscal policies but assured that his ministry believes taxation should start at the minimum wage threshold.
Thus, Labor supports the Treasury raising the exempted minimum in accordance with the negotiated salary hike.
This tax aspect remains crucial for a potential settlement with unions and may prompt higher-level discussions amongst involved ministries.
Earlier, Vice-President and Minister of Labor Yolanda Díaz received expert reports on minimum wage increases without employer participation.
These reports recommended increments of 3.44% or 4.41%—39 and 50 euros, respectively—using specific calculation methodologies.
Díaz praised the report for evidence-based policymaking.
Díaz called the recent minimum wage increases a success story, having risen by 54% since 2018 while employment has grown.
She attributed a decline in wage disparity to these increases, alongside notable gender impacts, as minimum wage fields predominantly employ women.
The overarching notion remains firm: full-time work at the current minimum wage secures the worker against poverty thresholds.
Díaz sees potential for agreement, looking to reconcile with both unions and employers despite the latter group being less inclined due to overlapping negotiations on workweek reductions—focusing heavily on sectors with prevalent minimum wage earners.
Only in recent years, labor and employee representatives negotiated increases without employers, following a precedent in the past year when Labor was open to a 4% rise conditional upon employer endorsement yet settled on over 5% in its absence.
The scenario might echo on January 22nd, where potential marginal concessions might be at stake, contingent upon employer participation.
Alternatively, union pressure could see increases surpass 5% if consensus remains elusive.
This constitutes a 4.4% rise and aligns with recommendations from labor experts relayed during the proposal's introduction.
However, unions have rejected the governmental proposition, advocating instead for a minimum wage hike to approximately €1,200 this year, which represents around a 5.8% increase.
Meanwhile, employers have received the governmental proposition and are set to deliberate on the proposal within their leadership bodies on January 22nd.
The Ministry of Labor plans to reconvene the social dialogue shortly thereafter to conclude negotiations.
Joaquín Pérez Rey, Secretary of State for Labor, expressed that the government maintains a 'flexible' stance, open to revising the proposal to reach an accord with social partners.
Nonetheless, a tripartite agreement appears unlikely given the existing landscape; employers are firmly opposed to even a 4.4% increase deeming it excessive, while unions argue that such an increment falls short of fulfilling the European Social Charter's mandate that the minimum wage should correspond to 60% of the average net wage.
The unions' refusal also touches on the possibility, as suggested by experts, that this year, unlike previous years, the Treasury may not elevate the minimum income exemption to match the new minimum wage.
UGT union had stated last Friday that they would not agree to a wage increase deal without incorporating this exemption.
Fernando Luján, UGT’s Deputy Secretary for Union Policy, highlighted that tax exemption for the agreed amount is essential for fiscal equity.
CCOO, focusing on increasing the minimum wage by 5-6% to the €1,200 mark, contends that reaching this amount would satisfy the 60% of the average wage requirement, irrespective of adjustments in taxable minimums by the Treasury.
While there is a difference in focus, union leaders insisted that it won't disrupt their joint strategy.
They’ve demanded the Ministry of Labor engage with the Treasury to resolve the taxation issue before the January 22nd negotiation.
Maricruz Vicente, CCOO’s Secretary of Trade Action, emphasized the need for thorough government representation at the table.
Pérez Rey noted that labor is not responsible for setting wage-related fiscal policies but assured that his ministry believes taxation should start at the minimum wage threshold.
Thus, Labor supports the Treasury raising the exempted minimum in accordance with the negotiated salary hike.
This tax aspect remains crucial for a potential settlement with unions and may prompt higher-level discussions amongst involved ministries.
Earlier, Vice-President and Minister of Labor Yolanda Díaz received expert reports on minimum wage increases without employer participation.
These reports recommended increments of 3.44% or 4.41%—39 and 50 euros, respectively—using specific calculation methodologies.
Díaz praised the report for evidence-based policymaking.
Díaz called the recent minimum wage increases a success story, having risen by 54% since 2018 while employment has grown.
She attributed a decline in wage disparity to these increases, alongside notable gender impacts, as minimum wage fields predominantly employ women.
The overarching notion remains firm: full-time work at the current minimum wage secures the worker against poverty thresholds.
Díaz sees potential for agreement, looking to reconcile with both unions and employers despite the latter group being less inclined due to overlapping negotiations on workweek reductions—focusing heavily on sectors with prevalent minimum wage earners.
Only in recent years, labor and employee representatives negotiated increases without employers, following a precedent in the past year when Labor was open to a 4% rise conditional upon employer endorsement yet settled on over 5% in its absence.
The scenario might echo on January 22nd, where potential marginal concessions might be at stake, contingent upon employer participation.
Alternatively, union pressure could see increases surpass 5% if consensus remains elusive.
Translation:
Translated by AI
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