Lisbon, Sept. 26, 2024 (Lusa) - Portugal's minister of labour, solidarity and social security believes that the government's proposal to increase the national minimum wage from the current €820 gross to €870 is significant.
As she left the statutory tripartite talks between the government, employers and unions meeting, on Wednesday, Maria do Rosário Palma Ramalho said that she had presented a "draft proposal for a tripartite agreement" to the social partners today.
"This is a wage enhancement agreement that not only focuses on the minimum wage, but also proposes measures for the enhancement of wages in general" and which is also "geared towards economic growth and competitiveness", she explained.
As far as the national minimum wage is concerned, the minister confirmed that she has proposed raising it to €870 gross next year. This figure represents a rise of €15 compared to the €855 gross that was provided for in the income agreement signed by the previous executive in 2022 and an increase of €50 compared to the €820 currently in force.
"There is a significant difference," emphasised the minister.
Asked about the possibility of updating the minimum wage so that minimum wage earners don't pay IRS (personal income tax), the minister was non-committal, saying that "there is a clause that contemplates updating the brackets" and that everything is still being "negotiated".
According to the document to which Lusa had access, the government also proposed increasing the minimum wage to €920 in 2026, to €970 in 2027 and to €1,020 in 2028. However, the minister refused to confirm this proposal.
The proposal for a tripartite agreement (between government, employers and unions) also includes the possibility of an exemption from personal income tax and productivity bonuses, "up to an amount equal to or less than 6% of the worker's annual basic salary", as provided for in the government programme.
But in the document consulted by Lusa, the government imposes some conditions, namely that it only applies if the employer "makes a minimum increase of 4.7% in the annual basic pay of workers earning less than or equal to the average annual basic pay existing in the company at the end of the previous year".
According to the minister, the draft agreement "also includes other measures to compensate companies for the additional wage effort".
On the tax front, according to the document, the proposal provides, for example, for a "progressive reduction in the corporate income tax rate until 2028, going from the current 21% to 19% in 2025.
The minister also reiterated that she would like the agreement to be closed before the deadline for submitting the draft state budget bill, 10 October, as there are some measures that will have to be included in the document in order to move forward.
According to the document consulted by Lusa, the government also proposes keeping the benchmark for the overall increase in salaries (discussed in collective bargaining) at 4.7% in 2025 and 4.6% in 2027, as provided for in the income agreement. For 2027 and 2028, since the idea is for the new agreement to cover the entire parliamentary term (the current one only runs until 2026), it is 4.5% in each of these years.
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