The recent proposal of reduce working hours In Spain stood out as one of the most important changes in labor regulations, promoted by the Minister of Labor, Yolanda Diaz. This measure seeks reduce weekly working hours from 40 to 37.5 hoursand this week the subject was debated at the Social Dialogue Table, in which the government, unions and employers participated. Despite the lack of consensus, notably due to the refusal of the Spanish Confederation of Employers’ Organizations (CEOE), the Ministry of Labor has been firm in this regard. The aim is for this reduction in working time to begin to be implemented from 2024, with a progressive plan which could initially apply a reduction to 38.5 hours, then to 37.5 hours per week.
The government emphasizes that the reduction in working hours should not have a negative impact on workers’ wages. This implies that, even if fewer hours are worked, the base salary of employees would remain stable and the value of the hourly wage would increase. However, dialogue between government and employers has been difficult, not least because entities such as the International Monetary Fund (IMF) have expressed concerns about possible economic consequences. However, the Executive defends that maintaining wages while reducing the working day contributes to the well-being of work and the quality of life of workers without affecting purchasing power. And how can this reduction affect the Interprofessional Minimum Salary (SMI)? in Spain, who sets the minimum wage that a person must receive for an entire day? Although the government says the annual SMI salary should not be reduced, the proposal will have implications for hourly pay, a key figure for workers in sectors with. more flexible or variable hours.
This is what the minimum wage looks like with the reduction of the working day
The interprofessional minimum wage (SMI) in Spain for the year 2024 is set at 15,876 euros per yeardistributed in 14 installments. This translates into a monthly income of 1,134 euros for those who receive an additional salary, or 1,323 euros for those who receive an additional salary in proportion to their payroll. In terms of daily income, the SMI is equivalent to 37.80 euros in 14 payments and 44.1 euros pro rata. Per hour, the current value of the SMI is 8.28 euros in 14 payments and 8.87 euros in 12 payments, taking into account vacations and additional pay.
With the reduction of the working day, the objective is that the annual salary of the SMI remains unchanged. This means that even though workers would work fewer hours, their total annual income would not be reduced. However, by shortening the day, the value of the SMI per hour worked would increase, benefiting in particular those who receive a salary based on their hours worked.
Expected evolution of the hourly SMI depending on the reduction in working time
The project to reduce the working day envisages a gradual application, which would initially reduce the working day to 38.5 hours per week before reaching 37.5 hours. This change in hours worked would have an impact on the calculation of the minimum hourly wage, since dividing the annual salary by a smaller number of hours yields a higher figure in terms of hourly remuneration. More specifically, it is expected that:
- With a 38.5 hour weekthe hourly SMI would be approximately 9.5 euros.
- With a weekly working day of 37.5 hours, the hourly SMI would increase until reaching approximately 9.75 euros.
Increase in the SMI: an additional objective of the Executive
In addition to reducing working hours, the Executive also has an additional objective in its sights: continue the gradual increase in the SMI to align it with 60% of the average salary in Spainan objective which is part of the electoral program of the current government. In 2024, the SMI experienced an increase of 5%, and is expected to continue to increase in the years to come, until reaching the desired proportion in relation to the country’s average salary.
To achieve this objective, the SMI is expected to increase by around 4.6% in 2025.provided that the average salary does not increase unexpectedly. According to data from the National Institute of Statistics (INE), the average salary in Spain increased by 4.1% in 2022, reaching 26,948.87 euros per year. Currently, the SMI represents 58.91% of this figure, which suggests that the government will have to continue to adjust the minimum wage in the years to come.
The impact of the measure on the modal wage and on low-income workers
Although the SMI has increased to get closer to the average wage, the most common wage in Spain, called the modal wage, remains lower than the SMI. In 2022, the modal salary was 14,586.44 euros, which means that many Spanish workers earn less than the country’s average wage and are close to the SMI ceiling. This underlines the importance of reducing working hours and increasing the SMI as measures aimed at improving the conditions of the lowest paid employees.
The modal wage represents the salary reality of a large part of the population and shows labor income inequalities in Spain. The combination of a shorter working day and a gradually increasing SMI will allow these workers to reach an income level close to the average wage, thus achieving greater equity.
