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, several relevant Social Security contribution parameters have been updated, with a direct impact on both employer costs and the net pay of certain employees.

In particular, the maximum contribution base is set at €5,101.20 per month. This means that employees who were previously capped at the maximum base may see an increase in the contribution base applicable to their remuneration.

• Payroll impact: in these cases, net pay may be lower than in 2025, as the employee’s Social Security contributions increase.
• Employer impact: employer Social Security costs will also increase in respect of remuneration that becomes subject to contributions up to the new cap.

In addition, the gradual increase of the Intergenerational Equity Mechanism (MEI) continues in 2026. The applicable rate is set at 0.90%, allocated under the general regime as 0.75% borne by the employer and 0.15% borne by the employee. This surcharge is intended to reinforce the sustainability of the public pension system and is added to the ordinary contribution rates.

Alongside the MEI, the so-called additional solidarity contribution remains in force and increases in 2026. This contribution applies to remuneration exceeding the maximum contribution base and exclusively taxes the portion of salary above that threshold. It is structured in brackets, with the following rates applicable in 2026:

• 1.15% on the portion of remuneration between the maximum contribution base and up to an additional 10% above that base.
• 1.25% on the portion between that additional 10% and up to 50% above the maximum base.
• 1.46% on the portion of remuneration exceeding 50% above the maximum base.

The solidarity contribution is shared between employer and employee and results in an additional cost for companies with highly paid employees, as well as a further reduction in the net pay of the employees concerned. This mechanism will continue to increase progressively over the coming years.

Finally, minimum contribution bases remain linked to the evolution of the Statutory Minimum Wage (SMI). As a result, approval of the 2026 SMI will also have an impact on contribution levels applicable to lower-paid employees.

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.