Employers Critique Government's Minimum Wage Proposal Ahead of Social Dialogue Talks

The employer organizations CEOE and Cepyme have expressed strong discontent over the government's fiscal proposal aimed at compensating businesses for the anticipated rise in the interprofessional minimum wage (SMI). In a statement released shortly before a forthcoming meeting of the social dialogue table to address the SMI increase for 2026, the organizations described the proposal as a 'trickster formula' that undermines the potential for a tripartite agreement involving employers, unions, and the government. According to CEOE and Cepyme, the proposal—which came to light just a day prior—represents a departure from the anticipated indexing of public contracts, replacing it with strategies they claim fail to adequately account for the financial burdens associated with the proposed SMI adjustment, which is set to increase from 1,121 euros to 1,221 euros gross monthly. The employers argue that the proposed measures introduce unattainable conditions that most companies cannot meet and constitute an infringement on collective bargaining and employee autonomy, describing them as 'pure interventionism.' They indicate that an assessment of the proposal will be forthcoming from their executive committee once they have received the necessary documentation from the government, though they foresee significant challenges ahead in achieving a consensus among employers and unions, as the Ministry of Labor had initially hoped. The employers have also voiced frustration over what they characterize as the government's disrespect towards social dialogue, citing the media leak of the proposal details as evidence. They highlight that exchanging genuine social concertation—enshrined in Article 7 of the Constitution—for mere political theatrics does a disservice to both the economy and society. The proposal, which CEOE claims to have learned about via media reports, offers a tax deduction for companies that increase their workforce with salaries above the SMI. This incentive can reach up to 100% of the SMI increase, provided that the new hires with salaries above the minimum are equal to or exceed 15% of the existing workforce. However, the proponents note that other stipulations will restrict access to this financial relief. For example, only companies whose labor costs account for more than 70% of their operating expenses will be eligible for the proposed tax deduction. Further, businesses wishing to qualify must maintain or grow their average total workforce over the two years following the 2026 increase. Critics, including the employers' associations, have pointed out that the proposal neglects to include freelancers and a vast array of companies across multiple sectors. Alarmingly, it also seems to exclude companies experiencing financial losses—those that may need support the most—as well as cooperatives and nonprofit organizations. On that note, the Ministry of Labor will convene once again with employers and unions in an effort to reach an agreement on raising the SMI to 1,221 euros gross per month, a change that is intended to take effect retroactively from January and will be exempt from income tax for employees. Government officials assert that this measure is not a blanket gift to all businesses, as underscored by Secretary of State for Labor Joaquín Pérez Rey. Related Sources: • Source 1 • Source 2