Read news from:
Austria
SHARE
COPY LINK

ECONOMY

€965 a month: Spanish government announces small rise in minimum wage

The Spanish government and workers' unions have agreed to raise the minimum inter-professional salary (SMI) to €965 gross per month.

Published: 17 September 2021 10:44 CEST
€965 a month: Spanish government announces small rise in minimum wage
Photo: Jacqueline Macou / Pixabay

The rise will be retroactive from September 1st 2021, so that workers who receive the minimum wage will see it reflected in the next payroll.

The agreement was finalised at 9pm Thursday night, when the Ministry of Labor reported in a statement that the minimum wage would rise by 1.6 percent. This means unfreezing the SMI, which had been set at €950 since January 1st, 2020.  

The rise of €15 however, is lower than the rate of inflation, which so far exceeds three percent, meaning that those on minimum wage have already lost purchasing power.

The increase is in the middle of the range that the government’s committee of experts recommended for 2021. 

Although the amount of €965 was finally agreed upon by both the government and the unions, the pact was held up throughout the day on Thursday because unions demanded that the government also specify future increases in 2022 and 2023. 

Earlier on Thursday general secretary of Workers’ Commissions (CCOO), Unai Sordo, said that the government should commit to increasing the SMI to €1,000 in January 2022 and that there should be another increase in January 2023.

The statement issued by the Ministry of Labour only said that this rise means “advancing in the commitment” shared by the government and unions so that the SMI reaches €1,049 euros in 2023, but did not specify when the next increases would be.  

“[The agreement] is positive, despite the moderate increase of €15 euros for 2021. The government has taken the average of the proposal of the commission of experts. It’s less than we expected, but we consider that the position of the Executive to increase the minimum wage is on the right track,” Mariano Hoya, deputy secretary of union policy at Unión General de Trabajadores (UGT) said.

The employers’ associations are not part of the agreement and rejected any increase outright. Antonio Garamendi, president of the Confederación Española de Organizaciones Empresariales (CEOE), insisted that raising the SMI will cause “less employment” and “more underground economy.” He also criticised the plan for more increases in the next few years.

The rise in the minimum wage has caused issues within the government coalition in recent months. Both Prime Minister Sánchez and Deputy Prime Minister Calviño opted to freeze SMI, while Deputy Prime Minister Díaz was in favour of increasing it.

READ ALSO: Why the Bank of Spain believes raising the minimum wage will hurt job creation

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

VISAS

EXPLAINED: When you can exchange visas in Spain

There are several different types of visas and residency permits you can get to be able to live and work in Spain, but what happens when your situation changes and you want to exchange your visa for a different one?

Published: 30 April 2024 14:20 CEST
Updated: 4 May 2024 08:21 CEST
EXPLAINED: When you can exchange visas in Spain

There are many different reasons you may want to exchange the type of visa or residency permit you have. Perhaps you’re on a student visa and have completed your studies, but still want to be able to stay in Spain. Or maybe you’ve been on a one-year non-lucrative visa, but can no longer afford not to work and want to exchange it for one where you’re allowed to work. 

Read on to find out which visas are possible to exchange and which are not. 

Student Visa to Digital Nomad Visa 

The simple answer is yes, it is possible to exchange your student visa for the new Digital Nomad Visa (DNV) that first became available last year. This will, however, depend on your individual circumstances and what job you plan on doing.

Firstly, in order to apply for DNV you must either have a degree from the field you want to work remotely in or have three years’ work experience in that industry. If you’ve just finished your studies this could be possible, but if you were studying something different, it could prove difficult.

If you are an older student, you could definitely have three years’ work experience in the industry you want to work in or you may have gained the experience working part-time in Spain while on your student visa.

Secondly, you must make sure you have worked for the company that hired you for a remote role for a minimum of three months before you apply for the DNV. The main caveat is that the company has to be registered outside of Spain as you are not eligible for the DNV if more than 20 percent of your income comes from inside Spain. This means that you will have to secure a remote job in another country while still on your student visa, making sure that you stick to the 30 hours a week you’re allowed to work.

Non-Lucrative Visa to Work Permit or Self-Employed

Being in Spain on the Non-Lucrative Visa or NLV can prove to be expensive because you’re not allowed to work, but have to prove you have a significant amount of savings or passive income. If you want to stay in Spain, beyond the initial year, you may be considering a different residency permit. Luckily, you can exchange it for a work permit or self-employed permit in a process called residence modification.

During your last few months on the non-lucrative visa, you are able to apply for jobs in Spain, which may give you the possibility of being granted a work permit. There are many prerequisites, including having lived in Spain for a year and being offered a pre-employment contract.

You could also decide to become self-employed at set up your own business. In order to do this you will need to meet the requirements that current legislation requires for opening and operating your chosen business. You will also need to sign up to the autónomo system, pay your own social security fees and submit your taxes five times a year.

READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?

Student Visa to Work Permit or Self-Employed

If you’re living in Spain on a student visa, then it’s relatively straightforward to exchange it for a work permit or become self-employed, if you want to be able to stay longer. The main requirement is that you have to have lived in Spain for three consecutive years, before you exchange it. This means, it’s really only possible for those who are doing a long-term course, such as a degree at a Spanish university. If you’re simply here for a year doing a language course, then it won’t be possible.

If you have been here for three years on a student visa, you have two options – the first is to find a job and become an employee by getting a work permit and the second is to become self-employed. If you opt for the first, the easiest way is to get a job offer and apply for the permit that way. Because you’ve already had a student visa and been here three years, it will be easier for companies to hire you as they won’t have to prove that there isn’t anyone from Spain or the EU that can do it first or that they have a shortage of professionals who can carry it out.

If you want to exchange it for a self-employment permit, you will have to present a business plan in order to get approval and prove you have the correct qualifications and experience to carry it out. If approved, then you will typically sign up to the autónomo system.

Student Visa to Entrepreneur Visa

Student visas are the easiest visas to modify in Spain, meaning you have many different options to exchange them if you want to stay longer. The Entrepreneur Visa – Visado de Emprendedor is another option that will allow you to stay for a period of three years (with the option of exchanging or extending). It is, however, slightly more complicated to exchange to than simply getting a work permit or becoming self-employed.

The Entrepreneur Visa is especially for those who want to set up a business considered to be innovative with a special economic interest for Spain. Unlike becoming just an autónomo, you must agree to be able to create employment opportunities for locals in the future. You could also in theory exchange your NLV for an entrepreneur visa too, provided you can prove that you haven’t done any work while you’ve been living in Spain for the year on your NLV.

Non-Lucrative Visa to Digital Nomad Visa

It may sound confusing, but you can now actually exchange your NLV for a DNV too. Even though you are not allowed to work while on the NLV, you can actually decide to change it for a DNV, so that you will be allowed to work remotely either for a company or for yourself via clients. The Unidad de Grandes Empresas (UGE), the body that deals directly with DNV applications, has confirmed this is possible and The Local has heard of people who have successfully done this too. The only thing to remember is that no more than 20 percent of your income can come from inside Spain once you change over. 

SHOW COMMENTS