Businesses face rising labor costs at least 1.782 million euros in 2026 as a result of the increase in the interprofessional minimum wage (SMI) next year. This amount includes such a share of the expected increase in salaries that each time … include more workers with SMIas well as the contributions that entrepreneurs also pay to Social Security.
The bill for the new increase in the SMI will depend on the final decision of the second vice-president, Yolande Diaz, who will have the final say on the exact percentage increase in the minimum wage next year. Although he committee of experts appointed by the Minister of Labor and Studies propose increasing it by at least 3.1%. This is the minimum amount of a range that companies already use to calculate this impact.
Each percentage point increase in the minimum wage over the course of a year represents an increase of 575 million euros in salary costs, according to calculations developed by the CEOE. With a minimum increase of 3%, the bill will far exceed this 1.7 billion. If Díaz decided to permanently increase it to the amount that the UGT and CC.OO. proposed, 7.5%, the total cost would exceed the 4.3 billion euros.
The impact of this measure will be felt in sectors of activity with lower average salaries. Namely: agriculture, breeding, fishing and above all home service. These are the jobs which have suffered the most from increases in the SMI, leading to losses of employees, as confirmed by the latest Social Security affiliation figures: last year, workers in domestic services were reduced by 13,500.
The proposal made by the committee of experts differs from the approach of the employers’ union, which advocates an increase in the SMI of 1.5% by 2026, the same initial percentage agreed between the government and the unions for the three million civil servants. The CEOE considers that the current minimum wage is already “oversized” by almost 5% (816 euros per year) because it is based on a premise that they consider to be erroneous: the committee of experts calculates the average salary with data from the Salary structure survey and not with the latest Labor Force Survey (EPA). This last reference is more realistic, in the opinion of employers, because it includes sectors with lower salaries, such as the primary sector, precisely those that bring a greater dose of reality to these estimates to determine what is the 60% of the average salary with which the SMI is estimated each year.
With or without accessories
The imminent increase in the minimum wage raises the question of its application. The Ministry of Labor assumes that it will approve a structural change when developing the SMI next year so that it only affects the basic salary and cannot be offset by the salary supplements available to each worker. If this measure is included in the increase decree, it will mean a structural change which, in the opinion of the CEOE, is not viable if it does not pass through the Congress of Deputies through a decree-law.
This change in SMI methodology will be confronted to legal meansas the employers’ association has already anticipated, considering that it cannot be approved by a royal decree which passes only through the Council of Ministers. Indeed, collective bargaining sources point out that Labor was forced to send the final text to the Council of State, a path that the decree does not generally follow when it only includes updating the SMI figures.
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