What was already common practice becomes mandatory by law: minimum wage will have to be reviewed every year. Change is “surgical” but can have a “significant impact” in some cases.
The proposed law presented by the Government to transpose the new European directive on adequate minimum wages brings “surgical” changes to the Labor Codeincluding the mandatory annual update of the National Minimum Wage (SMN), announced this Monday.
The measure, which goes beyond the update every two years required by European legislation, aims to consolidate an already common practice, interrupted only in exceptional situations, such as during the troika’s intervention period.
The bill, delivered to Parliament on December 18, redefines the criteria for determining the minimum wage and introduces measures to combat the weakening of collective bargaining. THE change is “surgical” but can have a “significant impact” in some casessays lawyer Angela Afonso to Negócios.
Currently, the Labor Code only requires that the minimum wage be determined, but not updated annually. With the new law, the value will have to be reviewed every yearbased on effective and timely consultation of the Permanent Commission for Social Coordination, which, in practice, prevents the freezing of the minimum wagepreviously permitted by law, even if rarely applied.
However, there is no consensus on the need for annual updates. Some experts argue that maintaining the current value can also be considered an update, as long as the established criteria are respected.
“The update itself can, however, result in maintaining the value”, reinforces lawyer Tiago Magalhães.
New criteria for determining SMN
The bill also introduces new criteria for determining the minimum wagereflecting the provisions of the European directive.
In addition to the needs of workers, the increase in the cost of living and the evolution of productivity, the general level of wages and their distribution, the rate of wage growth and long-term productivity levels will now be considered.
Despite changes in criteria, the Government maintains the trajectory of successive increases already agreed with the social partners until 2028.
This plan, established in the Tripartite Agreement for Salary Valorization and Economic Growth, provides for annual increments of 50 euros in the minimum wage, in order to achieve R$1,020 in 2028. In 2025, the minimum wage will be updated to R$870.
