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Government Proposes 3.1% Minimum Wage Increase to €1,221, Tax-Free

A decision is expected within days, with employer backing linked to possible leeway to pass costs into public contracts.

Overview

  • The Labour Ministry presented the plan to unions and employers, aligning with experts’ 3.1% recommendation under a non‑tax scenario, and is awaiting formal responses.
  • Unions signaled they could accept the rise if the minimum wage remains outside IRPF and if absorption of pay complements is curtailed.
  • Employer groups and Galicia’s regional government criticized any unilateral move and urged a very moderate, consensual increase.
  • To secure business support, the government pledged to study easing desindexation so public contracts can reflect higher wage costs, a change that depends on the Treasury.
  • If approved, the €37 monthly uplift would apply retroactively from January 1, cover about 2.5 million workers, and raise SEPE subsidy income limits to €915.75 per month.