Part-time workers could get 500 euro pay increase

Last week, the PSOE and Sumar political coalition presented details of their agreement if they are successful in forming a government led by Pedro Sánchez, one point agreed being the reduction in the working week to 37.5 hours per week, a goal that would be achieved in 2025 after being lowered to 38.5 hours per week starting next year.

Whereas many full-time employees may welcome the intention to give them more free time, a number of associations have rejected the proposal, arguing that it has been approved outside the framework of collective bargaining and that it will mean an increase in the costs that self-employed workers and small businesses must assume.

However, the question was also raised as to how the change would affect those on part-time contracts, as well as those contracted by the self-employed.

Thus, according to numerous experts who have consulted the plans in more detail, the reduction in working hours will not only have effects for businesses in terms of productivity or when calculating the cost per employee and hour of work. In the case of part-time employees, it could also mean an increase in the salary and contributions that they and the self-employed employer pay to Social Security.

This is mainly due to the increase in the bias coefficient. While right now an employee with a 20-hour weekly contract – half a day – receives 50% of the salary they would earn full-time, reducing the working week to 37.5 hours, the working time would represent 53.3% of the salary, the legal maximum allowed, with the corresponding increase in salary and contributions.

Therefore, businesses will have to choose between reducing work hours or paying part-time employees more.

Partial hiring is a fairly common situation among small businesses and self-employed workers with employees. Above all, in certain sectors such as Hospitality and Commerce, where weekend contracts are often signed. Therefore, reducing the working day would especially affect these activities, which are carried out by the majority of self-employed workers.

As Jaume Barcons, a labour lawyer at the Barcons agency explained, if businesses do not reduce the effective working hours of part-time employees, “they must increase their salaries in the same proportion as they do with full-time employees.”

For example, an employee who works 20 hours currently works 50% of the full day. With the change proposed by the PSOE and Sumar, it would increase to 51.9% in 2024, when the full working day will be 38.5 hours per week; and 53.3% in 2025, when this is 37.5 hours per week, “as long as it is by mutual agreement between the worker and the business,” specified the labour lawyer.

However, “the self-employed can also choose to reduce the working hours of their part-time employees in the same proportion as the full-time work hours are reduced,” explained Jaume Barcons. In the case of a part-time employee, they would go from having to work 20 hours a week to doing so only 18 hours and 45 minutes in 2025, “Maintaining the salary that they earn in the activity,” he recalled.

This would increase the labour costs of the self-employed if the reduction in working hours is approved.

Taking as a reference the average salary in Spain, 2,106 gross euro per month according to the latest Social Security data, a self-employed person who hires a part-time employee would go from having to pay 1,053 gross euro currently to 1,093 euro in 2024 and 1,122.5 euro in 2025.

In the case of maintaining employees in the Minimum Interprofessional Wage (SMI), set this year at 1,260 gross euro per month in 12 payments, self-employed workers with an employee who works a 20-hour week should pay them 653.90 gross euro in 2024 and 671.60 in 2025. In total, an increase of almost 500 euro more per year in salary alone.

To these figures we must add the part of the contribution that is borne by the self-employed with employees and businesses, as well as the Intergenerational Equity Mechanism (MEI), which is calculated on the salary received by workers. Thus, the increase in labour costs borne by self-employed workers will be even more pronounced.

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