Employment news for 2026: minimum wage, contributions, and key reforms

As of the date of this circular, the 2026 Statutory Minimum Wage has not yet been published. It is expected to be approved in the coming days, with retroactive effect from 1 January 2026.

Within the framework of the preparatory work, two reference scenarios are currently being considered, without prejudice to other possible outcomes depending on the final wording of the regulation:

• Scenario A: +3.1%, which would place the SMI at approximately €1,221 gross per month in 14 instalments (approx. €17,094 gross per year).
• Scenario B: +4.7%, which would place the SMI at approximately €1,240 gross per month in 14 instalments (approx. €17,360 gross per year).

The final SMI will depend on the wording ultimately approved (and, in particular, on how it fits within the applicable tax framework). 

In addition to the existing obligation to record daily working time, the approval of a new regulatory framework is at an advanced stage. This framework is expected to strengthen working time control, with likely entry into force during 2026. Without prejudice to the final wording, the change is expected to focus on:

• Primarily digital time recording, with technical requirements relating to data integrity, traceability and retention.
• Greater level of detail, including recording of actual start and end times and the treatment of breaks / non-working time, with sufficient precision.
• Accessibility and availability for employees and, where applicable, employee representatives, as well as facilitation of monitoring by the Labour Inspectorate.
• In practice, this will require reviewing (i) clock-in / clock-out systems, (ii) break policies, (iii) criteria for calculating effective working time, and (iv) internal supervision and correction procedures.

The recently introduced extension of birth and childcare leave remains in force, with a direct impact on workforce planning, replacements and role coverage.

In addition, proposals have been announced to extend paid leave linked to family-related situations (e.g. extended bereavement leave or specific care-related leave). However, these measures are still under legislative review and cannot be regarded as definitive as of the date of this circular.

For a detailed analysis of the currently applicable regulatory framework, you may consult the article previously published in this Link.

Specific legislation is currently under review to strengthen the regulation of non-employment internships, with the aim of preventing their use as a substitute for ordinary employment. In summary, the proposed approach focuses on:

• Reinforcing the genuine training nature of internships (training plans, competence-linked activities and effective monitoring / tutoring).
• Quantitative limits to avoid excessive concentrations (for example, maximum ratios per tutor and caps on the total number of interns).
• Recognition of rights and minimum conditions (rest periods, access to certain workplace facilities and reimbursement of expenses linked to the training activity, among others).

Practical impact for companies (if approved): review of internship agreements, allocation and sizing of tutors, internal documentation and controls, and a potential increase in indirect costs (management, reimbursements and compliance).

For 2026, relevant contribution parameters have been updated. In particular:

• Maximum contribution base: set at €5,101.20 per month. This means that employees who were previously subject to the maximum base may see an increase in the base on which they contribute.
  • Direct impact on payroll: for those previously capped at the maximum base, net pay may be lower than in 2025, as the employee’s contribution for contingencies and related items increases (without prejudice to withholdings and other elements).
  • Impact for the company: employer Social Security costs will also increase in respect of remuneration that becomes subject to contributions up to the new cap.
• Intergenerational Equity Mechanism (MEI): in 2026 the rate increases to 0.90%, allocated (under the general scheme) as 0.75% borne by the employer and 0.15% borne by the employee. This is a targeted surcharge aimed at reinforcing the sustainability of the pension system and is added to the ordinary contribution rate.
• Minimum contribution bases: these remain linked to the evolution of the SMI, meaning that approval of the 2026 SMI will also impact the minimum bases applicable to certain groups and, consequently, the cost of contributions for lower salaries.

Without prejudice to their parliamentary or regulatory progress, we highlight three areas that could affect organisation and compliance:

• Reduction of the working week to 37.5 hours, without salary reduction (under review), with potential impact on costs, shifts, working schedules and collective bargaining.
• Pay transparency and equal pay: regulatory adjustments are expected to reinforce information obligations and salary traceability, with possible additional requirements beyond those currently in force.
• Occupational risk prevention: an update is anticipated with a stronger focus on psychosocial and organisational risks (workload, digital disconnection, organisational factors, etc.).

From a case law perspective, the criterion of strict adherence to statutory compensation limits has been reinforced. However, debate remains open regarding a potential legislative reform that could modify the compensation regime with a more deterrent approach. As of today, no approved text exists, but this is a matter to be closely monitored in 2026 due to its potential economic impact.