The Government of Spain raises the Minimum Wage to 965 euros and extends ERTEs until 28 February

Moncloa Palace, Madrid

The Council of Ministers has approved an increase in the Minimum Wage (SMI) to 965 euros from 1 January 2022.

The Second Vice-President of the Government of Spain and Minister for Work and Social Economy, Yolanda Díaz, explained that the objective is for the SMI to reach 60% of the average wage in Spain by the end of the legislature in 2023, thus complying with the European Social Charter.

This path began in 2019 with the first increase of 22.3% to 900 euros. In 2020 and 2021, it was set at 950 euros and is now being increased by another 15 euros. In total, the SMI has risen by 229 euros since 2019, or 31%.

To date, Díaz continued, the increase has meant that the gender gap has been reduced by two points and that women and young people, those most affected by low wages, have seen their incomes improve: "Raising the minimum wage is not about financial economy or tax havens, it is about small incomes that will be applied in our neighbourhoods and that will reach normal people and the real economy, and that is why it is so important.

The vice-president said that it is impossible to speak of a fair recovery without this social commitment to workers, "who gave the best of themselves during the pandemic", and expressed her satisfaction that this government is coming out of the crisis by raising wages, and not lowering them as was done during the previous financial and economic crisis. Spain, said Díaz, is at the forefront in the European Union.

In this respect, the vice-president announced that she would work to ensure that the European Directive being negotiated on this issue could go ahead, and considered that the new German government could play a key role in this new European social policy.

Extension of ERTE benefits

Foto: Pool Moncloa/César P. SendraAfter the agreement reached yesterday with trade unions and employers' associations, the Government has approved the Royal Decree-Law to defend employment and economic reactivation and to protect the self-employed, which includes the extension of the Temporary Redundancy Programme (ERTE) benefits until 28 February 2022.

The Minister for Inclusion, Social Security and Migration, José Luis Escrivá, stressed that this is the sixth Royal Decree agreed since the start of the COVID-19 pandemic to protect employment and the productive fabric. The Government's first objective, the minister recalled, was to protect all affected workers and, as the health situation improved, the activation of employment. In this sense, Escrivá stated that the pre-crisis employment levels have been recovered.

ERTE training

The regulation establishes, on one hand, the extension of ERTEs in their current forms until 31 October 2021 and, on the other hand, contemplates new ERTE forms from 1 November, in this case linked to training as a mechanism to improve the employability of workers and minimise unemployment.

The minister explained that companies will be exempted from up to 80% of social security contributions if they carry out training activities.

For her part, Yolanda Díaz pointed out that this linking of ERTEs to training will make it possible to improve the skills of workers and respond to the needs arising from the change in the productive model, the digital and technological transformation and the just transition.

Moreover, this new mechanism, she said, anticipates the final result of the structural reform of the labour market that is being defined by the Social Dialogue Round Table, and which is expected to be completed before 31 December.

"The companies that today are subject to this Royal Decree, as soon as the labour reform is published, will have to modify the terms and make use of the new Article 47 of the Workers' Statute, which will now be of a structural nature", the minister explained.

ERTE of impediment and zero counter

With regard to the ERTEs of impediment, linked to limitations of activity, they will be maintained and may be requested due to administrative restrictions associated with COVID-19, according to Escrivá, who considers that they will not be common.

In addition, the '0 Counter' is extended until December next year, i.e., the amount collected during the ERTE will not be subtracted from the accumulated unemployment benefit.

ERTE specific to the Canary Islands

Foto: Pool Moncloa/César P. SendraThe minister confirmed that there will be a specific ERTE for all Canary Islands companies affected by the volcanic eruption on La Palma, whose exoneration percentages will be 100% in the case of impediment and 90% in the case of limitation of activity.

The Minister for Work has specified that it is initially valid until 28 February, with the possibility of extension. She has also advanced the approval of a specific employment and training plan for La Palma and the Canary Islands.

Extraordinary allowance in the tourism sector

Permanent-discontinuous workers in the tourism sector, especially in the Balearic Islands, will be able to access an extraordinary benefit. Yolanda Díaz pointed out that this year's tourist season, still affected by the pandemic, has not allowed many of them to obtain sufficient contribution time to be able to earn social benefits or access social protection mechanisms.

Extension of aid for the self-employed

José Luis Escrivá stressed that, in the case of the self-employed, the Executive is protecting not only situations of hindrance and limitation but also of a sharp drop in income. "We will enable a smooth transition to its final activation by maintaining the exemptions to social security contributions with a decreasing profile over time until January," he said.

Therefore, the four existing forms of protection for the self-employed with lower incomes or very sharp drops in income are maintained for those who are not yet able to carry out their activity normally.

The regulation approved today establishes a specific benefit for the self-employed who are forced to suspend or cease activity as a direct consequence of the volcanic eruption on La Palma. The minister stressed that in this case they will not need to meet the 12-month minimum contribution period requirement in order to benefit from the measure.

New Employment Activation Scheme

The Government has approved the Royal Decree that regulates the common employment programmes that constitute the framework on which the Active Employment Policies (PAE) are developed throughout the State territory, through the State Public Employment Service (SEPE) and the Regional Governments, according to their area of competence.

Yolanda Díaz has stated that compiling all the existing regulations and then reducing, concentrating and redesigning them has been an enormously complex task, but one which, once completed, will allow them to be adapted to the changing needs of the labour market and adapted to the particularities of each territory.

Díaz has highlighted, as new features, the programmes aimed at people over 45 years of age and young people, who are excluded from the labour market because of their age. Measures will be implemented to correct this bias, and the return of young Spaniards abroad and internal geographical mobility will be encouraged so that they can accept job offers anywhere in the country. There will also be specific programmes for vulnerable groups such as people with disabilities and victims of gender-based violence.

Special reconstruction plan for La Palma

Foto: Pool Moncloa/César P. SendraThe Minister for Territorial Policy and Government Spokesperson, Isabel Rodríguez, has reiterated that the Executive is committed to helping the island of La Palma and "leaving no one behind", as expressed by its president, Pedro Sánchez, with his presence on the island since the eruption occurred.

The Government, she assured, is working on a special reconstruction plan for La Palma, which today includes, as a first agreement, the declaration of the island as an area seriously affected by a civil protection emergency (the former disaster zone), which will allow all the ministries to activate different types of aid to deal with the emergency.

A second agreement is the granting of 10.5 million euros in direct state aid to the Canary Islands government to meet the housing purchase or rental needs of people who have lost their homes and for the purchase of basic necessities. The spokesperson specified that a "purse card" procedure had been agreed with the regional government.

The Government has also agreed to set up committees to ensure the monitoring and speedy management of aid. "We are concerned about being rigorous in the management of aid and in trying to streamline it, because the needs of the population of the island of La Palma require this", Isabel Rodríguez remarked.

The Joint Committee, which brings together all the administrations ,will meet for the first time this afternoon, chaired by the President of the Government of Spain. The Inter-Ministerial Committee, which includes 12 departments, will be adding initiatives to articulate the reconstruction of the island and will meet next Monday.

"The Government wants to convey to the people affected that its commitment is permanent and will last over time and, therefore, we will have a second phase to manage the recovery, once the volcano has stopped erupting and all the damage and reconstruction that they deserve can be assumed", concluded the spokesperson.

Recovery of the aviation sector

The Council of Ministers has approved the Airport Regulation Document (DORA) for 2022-2026, an essential instrument to guarantee the accessibility and suitability of the airport network. This regulatory framework will provide stability for airlines and users alike and ensure competitive airport charges, a key aspect in facilitating the recovery of the sector.

The spokesperson pointed out that the objectives of the DORA focus on traffic recovery, efficient network management, environmental sustainability and innovation. It also establishes a balanced investment framework: Totalling 2.25 billion euros for the whole period (450 million euros per year), which will help to overcome the severe consequences of the pandemic on air transport.

Non official translation