Yolanda Díaz proposes an increase of the SMI of a minimum of 4.9%

The annual increase of the Minimum Interprofessional Wage (SMI) in Spain is not approved, in ordinary terms, through a parliamentary procedure, but rather by the Government through a royal decree. The role of the Cortes Generales focuses mainly on the enabling legal framework and on the political oversight of these decisions, and only in specific scenarios does it participate decisively (for example, if a royal decree-law is used or if the legal regime of the SMI is to be reformed by law).

1. Legal framework: who sets the SMI and how

Article 27 of the Workers' Statute (consolidated text approved by Royal Legislative Decree 2/2015) establishes that:

• The Government shall annually set the minimum interprofessional wage.
• It must do so after consultation with the most representative trade union organizations and employer associations.
• It must take into account four criteria: consumer price index, national average productivity, labor's share in national income, and general economic situation.
• Revisions during the year may be foreseen if inflation deviates from what was expected.

In development of this provision, each year a royal decree is approved that sets the amounts. For example, Royal Decree 145/2024, of February 6, which sets the minimum interprofessional wage for 2024, expressly states that it is issued “in compliance with the mandate to the Government [...] contained in article 27.1 of the Workers' Statute.”

2. Ordinary procedure: Government royal decree

The typical procedure to raise the SMI is, therefore, governmental and regulatory, not legislative:

• The Ministry of Labor and Social Economy negotiates within the framework of social dialogue with unions and employers' associations.
• A draft royal decree is prepared that specifies the new amounts and application rules.
• The text undergoes the general regulatory drafting procedures (reports, consultation and hearing when applicable, impact assessment).
• The Council of Ministers approves it as a royal decree.
• It is published in the Official State Gazette (BOE) and comes into force on the date indicated, usually effective from January 1 of the corresponding year.

In this ordinary scheme, the Congress and the Senate do not vote on the specific SMI increase. Their function is to have previously approved the norm that grants the Government this competence (the Workers' Statute) and to politically oversee how it is exercised.

3. What role does Parliament play in practice?

Although it does not approve the annual royal decree, Parliament influences the SMI through several channels:

• Framework law: any substantive modification of the rules of the game (for example, changing the criteria of article 27 or altering the general design of the SMI) requires a law, processed as a government bill or a private member's bill from parliamentary groups, with the full procedure in Congress and Senate (consideration, amendments, committee, plenary, passage to Senate, possible vetoes or amendments, sanction and publication).
• Political oversight: parliamentary groups can:
  • Submit oral or written questions to the Government about the SMI increase.
  • Promote interpellations and motions that guide or criticize SMI policy.
  • Approve non-legislative motions (PNL) in plenary or committee urging the Government to raise it to a certain amount or to follow specific criteria. These PNLs have political value but no binding legal effect.
• Budgets and government veto: since the SMI is a variable with clear impact on public spending and on revenues linked to contribution bases, if a group tried to set by law a specific SMI increase that implied increased spending or reduced revenues, the Government could invoke article 134.6 of the Constitution to veto the processing of that initiative or certain amendments.

4. Exceptional scenario: royal decree-law on the SMI

In situations of extraordinary and urgent need, the Government could opt to regulate an SMI increase through a royal decree-law. In that case, a specific parliamentary procedure appears:

• The royal decree-law comes into force upon its publication.
• It must be submitted to the Congress of Deputies within a maximum period of 30 days for a debate and vote on validation or repeal.
• The Congress can:
  • Validate it (maintains its validity).
  • Repeal it (it becomes ineffective, although the effects already produced must be managed).
  • Validate it and agree to process it as a bill, thus opening the door to amendments and modifications.

During periods when the Congress is dissolved, this control is exercised by the Permanent Deputation, which can validate or repeal the decree-law and also decide on its possible processing as a bill.

In summary, the SMI increase is legally structured as a Government decision by royal decree, supported by article 27 of the Workers' Statute, while the parliamentary procedure mainly comes into play to define the general legal framework and to politically control and guide that decision, or more intensively when the extraordinary route of the royal decree-law is used.

The competencies of the Minister of Labor and Social Economy are mainly defined by the royal decrees that regulate the structure of ministerial departments and the specific organization of this ministry. Based on current regulations, her functions can be grouped into several material and organizational blocks.

1. Basic normative framework

The two key pieces are:

• Royal Decree 1009/2023, of December 5, which establishes the basic organic structure of ministerial departments. Article 8 defines the senior structure of the Ministry of Labor and Social Economy (organs for which the minister is politically responsible) and article 23 regulates the configuration of ministerial cabinets (including those of the vice presidencies who are also heads of a department).
• Royal Decree 502/2024, of May 21, which develops the basic organic structure of the Ministry of Labor and Social Economy. Its article 1 specifies the material scope of the department and establishes that all these functions are exercised “under the superior direction of the person holding the Department,” and its additional provisions regulate aspects such as substitutions and delegations in this area.

Additionally, Royal Decree 502/2024 refers to Law 21/1991, of June 17 (Economic and Social Council), whose organization is attached to the Ministry of Labor and Social Economy, reinforcing the minister's role regarding this consultative body on socioeconomic and labor matters.

2. Central material competencies

Article 1.1 of Royal Decree 502/2024 establishes the core material attributions of the department, exercised under the minister's direction. The Ministry is responsible for the proposal and execution of Government policy in:

• Labor and labor relations: design and development of labor policy, covering the regulation of labor relations, substantive labor regulations, and dialogue with social agents.
• Employment: planning and execution of active employment policies, in coordination with other administrations and related European funds.
• Self-employment: definition and monitoring of specific policies aimed at self-employed workers.
• Social economy: promotion of policies related to cooperatives, labor societies, mutual societies, and other social economy entities, which the royal decree identifies as one of the pillars of the labor market.
• Corporate social responsibility: proposal and coordination of public policies on corporate social responsibility, along with integrating these criteria into the labor market.

In practice, this means the minister is responsible for guiding, directing, and submitting to the Government the regulatory projects and strategic public policy decisions in these five areas, as well as supervising their execution.

3. Internal direction and organization of the department

Article 1.3 of Royal Decree 502/2024 establishes that the Ministry “under the superior direction of the person holding the Department” develops its functions through the following senior and management bodies:

• State Secretariat for Labor.
• State Secretariat for Social Economy.
• Undersecretariat of Labor and Social Economy.

And article 8 of Royal Decree 1009/2023 specifies this structure, including the dependency of the Technical General Secretariat on the Undersecretariat. The minister therefore exercises political direction and general coordination of these units, which in turn oversee the directorates-general and subdirectorates responsible for daily management.

Additionally, article 1.4 of Royal Decree 502/2024 foresees a Cabinet “as an immediate assistance body to the person holding the Second Vice Presidency of the Government and head of the Department, with the rank of Undersecretariat,” and an advisor with the rank of Director General who assumes legal coordination functions, according to article 23.1 of Royal Decree 1009/2023. The minister directs this Cabinet, which channels her political, technical, and communication support.

4. Attachment of the Economic and Social Council

According to article 1.5 of Royal Decree 502/2024, and in application of Law 21/1991, the Economic and Social Council (CES) is attached to the Ministry of Labor and Social Economy. This places the minister as the main governmental interlocutor with this consultative body on socioeconomic and labor matters, reinforcing her role in coordinating policies that require dialogue with social agents.

5. Substitutions and delegation of competencies

The third and fourth additional provisions of Royal Decree 502/2024 regulate, within the Ministry:

• Substitution regimes of the heads of senior and management bodies (State Secretariats, Special Commissioner for Social Economy, Undersecretariat, and directorates-general), establishing who acts in case of vacancy, absence, or illness, unless expressly designated otherwise by the superior holder.
• The continuity of delegations of competencies granted by the senior and management bodies of the department, even when bodies have been suppressed or modified, reassigning such delegations to the new competent bodies.

Consequently, the minister retains the power to internally organize the functional distribution of the Ministry's competencies through delegations and to order ordinary functioning through the substitution mechanisms provided in the regulation.

6. Summary

In summary, according to current legislation, the Minister of Labor and Social Economy is responsible for directing Government policy in labor, employment, self-employment, social economy, and corporate social responsibility; coordinating and guiding the State Secretariats and the Undersecretariat of the department; relying on a high-level cabinet for immediate assistance; exercising the main interlocution with the Economic and Social Council; and ordering, through delegations and substitutions, the daily exercise of these competencies within the ministerial structure defined by the cited royal decrees.

The recommendations of the Advisory Commission for the analysis of the SMI, by themselves, do not have normative effect: the new minimum wage is only applied when the Government sets it through an annual royal decree, under article 27 of the Workers' Statute (ET). However, for those recommendations to serve as a solid and legally defensible basis for a new SMI, they must meet a series of material and procedural requirements that condition the governmental decision.

1. Anchoring in article 27 of the Workers' Statute

According to article 27.1 ET, the Government sets the SMI each year:

• After consultation with the most representative trade union and employer organizations.
• Taking into account at least four factors: CPI, national average productivity, labor's share in national income, and general economic situation.

Therefore, the Commission's recommendations must:

• Be explicitly built on those legal criteria, providing data and methodology on inflation, productivity, income distribution, and economic context.
• Allow the Government to justify in the preamble of the royal decree how those elements were weighted. Royal Decree 87/2025, for example, justifies the 4.41% increase indicating that it “takes into consideration jointly all the factors contemplated in article 27.1 ET” and expressly cites the Advisory Commission Report of January 15, 2025.

2. Advisory nature and respect for Government competence

The competence to set the SMI is exclusive to the Government by virtue of article 27 ET and article 149.1.7.a of the Constitution (labor legislation). From this derive two requirements:

• The Advisory Commission can only issue non-binding recommendations; it cannot “set” the SMI nor attribute normative effects to itself.
• Its proposals must be formulated as scenarios, ranges, or options, leaving a margin of political decision to the Council of Ministers, who finally approves the SMI royal decree.

If the recommendations tried to impose themselves as mandatory or effectively limited the Government's decision margin, they could be considered a competence invasion and weaken the legal defense of the decree against a possible challenge.

3. Sufficient motivation, transparency, and good regulation

The preamble of Royal Decree 87/2025 emphasizes that the norm complies with the principles of good regulation of article 129 of Law 39/2015: necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency. For the Government to support this relying on the Commission, its recommendations must:

• Clearly explain the methodology used (statistical sources, reference periods, how the 60% of average salary is calculated, etc.).
• Justify the balance between wage sufficiency and economic effects (employment, business costs, public spending derived from references to the SMI in benefits).
• Be consistent with the international commitments cited by the Government itself (for example, the goal of setting the SMI at 60% of the average salary according to the European Social Charter and the SDGs).

Only thus can the Government incorporate the report into the preamble as an element of reinforced motivation, reducing the risk of challenge for lack of rational justification.

4. Relationship with collective bargaining and other regulations

The SMI is a legal floor that coexists with wages set by collective agreements. The Commission's recommendations must respect that architecture:

• They cannot be designed as an instrument to replace or empty collective bargaining, nor to set detailed wage structures that correspond to agreements.
• They must consider that SMI royal decrees include rules of compensation and absorption (such as article 3 of RD 87/2025), to avoid abrupt mismatches where professional wages are already higher on an annual basis.
• They must take into account the broad use of the SMI as an indicator in other norms (access to scholarships, aid, free legal assistance, benefits, etc.), proposing if appropriate “non-affection” mechanisms or transitional rules like those in the sole transitional provision of RD 87/2025.

5. Procedure and participation guarantees

Finally, although the Advisory Commission does not replace the mandatory consultation with unions and employers, its recommendations must:

• Be inserted in a transparent procedure, with dated, publishable, and traceable reports.
• Be compatible with the prior consultation of social interlocutors required by article 27.1 ET and with the hearing and public information procedures that the Government highlights in RD 87/2025.

In sum, for its recommendations to serve as a valid basis for a new SMI, the Advisory Commission must respect the framework of article 27 ET, act as a strictly consultative body, technically motivate its proposals, and not exceed either the Government's competence or the space of collective bargaining.