The reduction of the single social tax (TSU), approved on Thursday by the Government to alleviate business costs with the increase in the national minimum wage (NMW), only cover workers hired by the end of May. All contracts entered into after that date, even if they relate to workers earning the minimum wage, will not benefit from this reduction.
According to the proposal that had PUBLIC access, reduction of 23.75% to 23% of TSU paid by employers will be dependent on three cumulative conditions. Workers must be bound “since at least May 2014″ and the company, between January and August, having received “at least a month of” compensation equivalent to the minimum wage (ie 485 euros). Moreover, companies have to have their debts to the contributory Social Security.
The law reflects the principles of the agreement signed on Wednesday by the Government, employers’ associations and the four UGT (CGTP remained outside the agreement) and the form was found by the executive to convince the bosses to accept increase SMN from 485 to 505 euros, from 1 October and throughout the year 2015.
Support now adopted (and may still change) is temporary and respect the contributions of wages paid between November 2014 and January 2016, including holiday pay and Christmas. As explained yesterday the Minister of Parliamentary Affairs, Luis Marques Guedes, this reduction in TSU aims to give companies “a period of adjustment to internalize” the increase in the minimum wage 20 euros. And denied it was “a prize for those who practice low wages”, recalling that does not apply to new contracts.
No diploma now approved, the Government undertakes to transfer from the state budget to the budget of Social Security the amount necessary to fund the reduction of the contribution rate payable by employers. According to Marques Guedes, the impact should be around 20 million euros.
The increase of 20 euros already starting next month will benefit 12% of workers for others, who work full time (seconds the most recent data from the office of the Ministry of Economy) strategy. UGT speaks on 350 000 workers and UGT in almost half a million. The numbers vary depending on the source and not always include public officials who receive SMN.
Also in the universe of the state, the numbers vary depending on the source. The Finance Ministry says it has no data for the NMS, a time that statistics relate to average wages. The unions in the civil service speak for 20 000 workers, while the UGT realizes 75 000 (including businesses) and the CGTP on 100 000. On Thursday, the Minister for Parliamentary Affairs, asked about what impact this increase will have on payments of salaries from the state, said it will be waste since the Public Administration virtually “no remuneration that level” in the state structure.
Impact reaches intermediate wages
Reduce TSU companies to compensate by increasing SMN is not unprecedented. It also happened in 2010, the government of José Sócrates. The difference is that at the time the contributions of companies dropped one percentage point and the benefit also covers workers with wages close to the minimum and that ultimately also benefit from an increase (in order to maintain the differential between the various workers).
In this diploma approved Thursday will not be. The support does not cover the costs that companies will have to bear with workers who currently receive values between 485 and 505 euros (the so-called intermediate wages), extending the burden on businesses with the decision.
The Economist University of Minho, John Cherry, remember that the impact of increased SMN “will be greater the higher the proportion and workers who have close the current value of the NMW pay.” And gives the example of small and micro enterprises, located in the North and in sectors such as agriculture and fisheries, mining, followed by textiles and clothing, footwear, food, furniture and construction. Even added business services, catering and retail trade.
These companies, points out, “will have a significant increase in their labor costs and can not reflect them their prices, since they are very competitive sectors “. With Maria Lopes
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