The Government will approve the increase of the minimum wage on Friday in the Council of Ministers. The increase, from 22.3% to 900 euros, could have consequences for many subcontracted companies that provide services to Public Administrations. In contracts for cleaning, monitoring or maintenance, it is common that the remunerations are below 900 euros. And with that raise of the minimum wage in a single time your salary costs can shoot up. But the companies do not have easy to pass on that increase to the contracts already won, because the previous Government of the PP launched the deindexation law, which prohibits in general that the revisions of public contracts are linked to inflation.
The current standard does allow for some exceptions such as that companies can pass on to the Administration the increases in their raw materials. But it does not allow increases in wage costs to be transferred as part of the bill beyond what the salaries of civil servants raise as it is included in the State Budgets. And in 2019, the revaluation announced for public employees will be 2.5%, far from that 22.3% that will raise the minimum wage. According to whether or not it has been included in the specifications, the deindexation law can govern the prices of many contracts.
"Not only they have skipped the previous agreement subscribed in the social dialogue. This increase will have an impact on labor costs and employment. And it will be a big problem for companies that have little margin and provide services to the Administration in very labor-intensive activities such as cleaning, sanitation or dependency, and that are not going to dare to take this situation to the courts ", complains Jordi García Viña, director of labor relations of the CEOE employers. The idea of the deindexation law is that companies could not claim those items that strictly correspond to their management, alleged the Government of the PP when it approved.
A rise of 22%
"One thing is to limit the cost increases year by year, and quite another is a change as radical as raising the minimum wage by 22%. The logical thing is that the increase is assumed by the Administrations, as was done at the time with the VAT. The reason is that it is not a fact attributable to risk and luck. It goes beyond. If this increase is not contemplated in public procurement, the legality would be doubtful, "says José María Gimeno Feliu, professor of administrative law at the University of Zaragoza.
Given this problem, the response prepared by the Government is that "each case should be analyzed and a specific and temporary formula to cushion the effects in those cases in which the rise in the minimum wage generates significant imbalances," sources of the Executive explain. According to these, the Treasury will have to identify which contracts have to be reviewed if it is demonstrated that the impact on the workforce is substantial. And it could even happen that in some cases part of the cost increases have to be assumed by the contractors. The final decision will be from the Treasury departments of the Administration. That is to say, the deindexation law will not be changed and customized solutions will be sought.
These kinds of solutions do not satisfy the CEOE employer, which is doing casus belli of the issue at a time when he is also distancing himself from the Government for having left him out on issues such as the modification of the labor reform. "There are thousands of public contracts to add all levels of Administration. That the dealer has to claim one by one is not a good system and may take a long time. The employers demand a generalized and automatic solution, "says García Viña.
Legal sources remember that there is already a doctrine of the Supreme Court that obliges the Administration to face the increase in costs when it is the result of a decision of the Executive. In specialized jargon, we talk about factum principis: when a normative alteration of the prince entails a worsening of the conditions of the contracting party, it is assumed by the public authority.