Being well-informed about labor regulations and financial adjustments is imperative for international companies with a presence in Spain.
One significant change revolves around the Resolution of October 5, 2023, issued by the Secretary of State for Budget and Expenditure.
This directive provides comprehensive guidance on the additional 0.5 percent pay increase linked to the evolution of the IPCA (Consumer Price Index for All Urban Consumers), as stipulated in Article 19.Two.2.a) of Law 31/2022, enacted on December 23, 2022, outlining the General State Budget for Spain for the year 2023.
The extra 0.5 percent increase isn’t a general adjustment but is specific to certain categories of personnel within the national public sector.
This encompasses senior executives, managerial personnel, and other employees directly authorized by law to receive this additional increment.
This increase is calculated based on the compensation rates in effect on December 31, 2022.
Effective from January to September 2023, this increase will be paid in the October 2023 payroll.
Please note that the additional compensation will be detailed in the salary receipts as “Back Payment of 0.5 Percent IPCA 2023.” These receipts will meticulously outline the specific compensation components subject to this additional increment and the precise retroactive payment period.
To streamline administrative procedures, a model request form for the 0.5 percent retroactive payment is provided in the annex to this resolution.
Electronic methods are encouraged to submit requests and facilitate communication between administrative bodies.
No Change in Assignment: Civil servants and statutory personnel who maintained the same assignment status from January 1, 2023, to the last day of the previous month before the retroactive payment date will automatically receive their 0.5 percent increment from the ministry, organization, or entity they were associated with during that period.
Change in Assignment: Individuals who changed their assignment within the national public sector between January 1, 2023, and the last day of the previous month before the retroactive payment date can initiate the retroactive payment process by requesting the corresponding personnel department.
Change in Assignment to a Different Public Administration: If an individual moved to serve a different public administration within the same period, the retroactive payment for their assignment period within the national public sector will be administered by the entity where they originally rendered services, upon request.
Inactive Status: Personnel who were not in active service during the specified period, whether due to retirement or other reasons, can request their retroactive payment through the entity that made the payment. In the event of the employee’s death within the same period, heirs can make the request in accordance with civil law.
Triennial Payments: If an individual received only triennial payments throughout the reference period, the retroactive payment related to this component will be processed by the entity that originally made these payments.
The same procedures as those described for civil servants and statutory personnel apply to senior executives and managerial personnel covered by Article 21 of Law 31/2022, dated December 23, 2022, regarding the General State Budget for 2023.
Contracted personnel whose collective agreement specifies the method for applying the increase stipulated in the General State Budget for 2023 will follow the agreement’s provisions.
For contracted personnel not covered by a collective agreement, the retroactive payment will be processed in the first paycheck of the month following the completion of the procedures specified in Law 31/2022, dated December 23, 2022, regarding the General State Budget for 2023.
However, in accordance with the provisions of Article 24.Three of Law 31/2022, distribution agreements that restrict the uniform application of the 0.5 percent increase for all workers and in all compensation components, except those not subject to increments under the law or applicable collective agreement, will not require the reports and authorizations specified in Article 34.
However, these agreements must be communicated to the Secretariats of Budgets and Expenditure and Civil Service for informational purposes.
Staying informed about changes in labor regulations and budgetary matters is essential for international companies with a presence in Spain.
At Employing In Spain, we understand the significance of these developments for both employees and employers. Our experts are ready to assist you with any employment-related inquiries, so feel free to get in touch and schedule a consultation.
We are dedicated to helping you navigate the intricacies of employment in Spain and achieve your organizational objectives.
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