EXPLAINED: How Spain plans to raise its minimum wage by as much as €250

The Spanish government is considering raising the minimum wage in 2021 by an amount which is yet to be confirmed, but which is expected to be between €50 and €250 more per month than the current base salary. Here’s what you need to know.

EXPLAINED: How Spain plans to raise its minimum wage by as much as €250
A delivery service worker in Burgos, Spain. Photo: Cesar Manso/AFP

What’s new?

Spain’s Labour Ministry has announced its intention to raise the Minimum Interprofessional Salary (SMI) in 2021 and has promised that its committee of experts will this month announce how much the minimum wage should rise over the next three years and at what pace.

Despite the ministry already having made the announcement, there are still many unresolved doubts among the group of experts as to exactly how and when this should happen. 

Spain’s current minimum wage is set at €1,108.3 gross per month. In reality, this equates to €950 a month, payable in 14 instalments to allow for the double monthly salary in July and December. 

Joaquín Pérez Rey, secretary of the State of Employment and Social Economy explained during a recent press conference: “The Spanish government has not abandoned the idea (of raising the SMI) and is waiting for the conclusions of the group of experts to be definitively produced… We trust that throughout the month of June, the commission will be able to give their opinion on what salary to set and the growth rate”.

How is the minimum wage calculated and how much would the new figure be?

According to a report by Vozpópuli, sources have told the news site that the committee of experts have found their task very difficult. Even a few weeks ago they had not yet been able to define what Spain’s average salary is and, therefore, what would be 60 percent of that average salary, to know how far the SMI should go up.

The process is complex, since neither the European Union nor The Organisation for Economic Co-operation and Development (OECD) has given guidelines on how to calculate what the mean or median wage for a country is.

The objective is that the minimum wage should reach 60 percent of the average wage in order to comply with the European Social Charter, but in order to achieve that objective it must first be defined.

Based on this percentage the amount could range between €1,000 and €1,200, but the figure hasn’t yet been officially confirmed.

However, most Spanish news sources have said that the initial minimum wage rise Labour Minister Yolanda Díaz is pushing for in 2021 would be of €50, up to €1,000. These plans have been in the pipeline for Spain’s left-wing government since 2019, the intention being to continue increasing el salario mínimo up to €1,200 by 2023. 

Opposition to raising the minimum wage

At the end of 2020, the Minister of Economy Nadia Calviño aligned herself with Spain’s top business people and managed to freeze an increase to minimum wage, until the economy could recuperate.

In fact, the Spanish Government did not include its intention to raise the minimum wage in its Recovery Plan sent to Brussels, even though Minister of Labour and Social Economy Yolanda Díaz recently insisted that these plans remain in place.

Given the refusal by businessmen to raise SMI, it seems difficult for the Government to approve this measure with everyone in agreement.

The Economic and Social Council (CES), Moncloa’s advisory body on economic and labor matters, has indicated in its Annual Report, published on Wednesday, June 2nd, that there is empirical evidence that increases in the SMI that are not consensual can generate a negative impact on a macroeconomic level. The same will happen if the minimum wage rises above 60 percent of the average salary of an economy.

“Historically there has been a negative impact on the economy when it has been adjusted abruptly and without an agreement,” warns Raymond Torres, director of Situation and International Analysis at Funcas and an expert appointed by the CES.

The last time Spain increased the minimum wage was in January 2020 when Spain’s new Socialist government brokered a deal lifting the minimum wage by 5.5 percent from €59.80 to €1,108 ($1,230) gross a month.

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How to change the title holder of utility bills in Spain

When you move into a new property in Spain you will need to change the account or contract holder over, so that any future water, electricity or gas bills will be in your name. It's not as easy as you may think; here's how you go about it.

How to change the title holder of utility bills in Spain

Changing the name on your utility bills and the payment details should in theory be relatively straightforward, however you may come up against some common problems which can make the change pretty complicated.

Firstly, you will need to find out which energy companies have been contracted for your property.

You can do this by asking the previous owner themselves, contacting your landlord if you’re renting or asking your estate agent to find out for you.

When it comes to water, this should be provided by your local council or city, so you won’t need to contact the previous occupant for this one. 

How do I change the title over?

When you first move in, remember to note down the numbers on the gas, electricity and water meters, so you can give these to the utility companies and they can record how much you should owe, instead of having to pay for the previous occupant’s consumption as well.

Next, you will then need to contact the energy company supplying your property or water provider and ask for a cambio de titular a nombre del arrendatario o comprador (ask for a change of ownership in the name of the renter or buyer).

The process should be completely free for electricity and gas, but in some cities, you may need to pay a deposit for changing the title of the water bill, which you should get back when you vacate the property. The deposit can be anywhere between €50 and €100.

Contacting the energy company by phone may be the best way to make sure everything is done correctly, but some companies also have online forms where you can request a title change. When it comes to water, most cities will have water offices you can visit or specific e-mail addresses if you can’t contact them over the phone. 

There are a few pieces of information you’ll need to have on hand before you contact the company. These are:

  • The full name of the previous person who had the bills in their name
  • Your NIE / DNI
  • The address of the property
  • The date you moved in
  • The CUPS code (not needed for water)
  • Your padrón certificate (for water only)
  • A copy of the deeds of the property or rental contract
  • Your bank details

With all this information, they should be able to change the name over on the account relatively quickly, so that any future energy bills will go directly to you.

At this time, you can also change your tariff or amount of energy contracted to suit your individual needs.

How do I find the CUPS code?

The CUPS code or Código Unificado del Punto de Suministro (Universal Supply Point Code) is a number that identifies each individual property that receives electricity or gas. The number doesn’t change, so you could ask the previous occupant for this as it will be written on their energy bills.

Alternatively, if this isn’t possible you can contact your energy distributor – these are assigned by area and stay the same. By giving them your name, address and ID number such as NIE, they will be able to give you the CUPS code associated with your property.

What if I want to change to a new energy company?

If you’d prefer not to contract the energy company that the previous owner had, you can also choose to go with a new one. In this case, you will still need all of the same information and numbers as above, but you will contact the energy provider of your choice and the type of tariff you want to pay.

How long will it take to change the name over?

It can take between 1 and 20 days for the bills to be changed over into your name. The previous occupant will receive their final bill and then you will receive the new one from the date you moved in.

What are some of the problems I might come up against?

The most common problem is when the previous occupant is not up to date on paying their bills and has some outstanding debt. In this case, if you try to change the title over into your name, you will also be inheriting the pervious owner’s debt.

In this case, you will have to get the previous occupant to pay their outstanding bill before you can change it over into your name. If you have problems getting them to pay their bill, then you can show proof of the date you moved in by sending in a copy of your deeds or rental contract. This should in theory allow for the transfer of ownership without having to take on the debt, however it can be tricky process, often calling the energy company multiple times and waiting for verification of the proof.

What if the energy services have been cut off?

In the case that the property has been uninhabited for some time, the previous owners may have deactivated or cut off the utilities. If this is the case, then you will need to call the energy providers to activate them again. This will typically involve paying several fees to be able to get them up and running. The amount you pay will depend on the energy distributor and where the property is based in Spain.