Minimum Salary for Highly-Qualified Applicants Increased

 The situation

Effective February 10, 2020, the minimum monthly salary for highly-qualified Residence Visa applicants in Portugal increased to EUR 1,914 (1.5 times the average gross national salary of EUR 1,276), calculated over 14 payments, up 17.7 percent from 2019. Based on this increase, Fragomen advises employers to guarantee EUR 27,000 per year in 14 payments, up 17.4 percent from 2019.

The exchange rate at the time of publication of this alert is 1 EUR to 1.10 USD.

A closer look

• Existing employees. Employers of highly-qualified foreign workers (with post-secondary education or at least five years’ relevant professional experience) currently under a Residence Visa need not increase foreign nationals’ salaries.
• Initial and renewal applications. Employers of highly-qualified foreign nationals seeking to obtain or renew a Residence Visa on or after February 10, 2020 are advised to increase foreign nationals’ salaries to comply with the new rule. Immigration applications that do not meet the new minimum salary may face additional scrutiny.
• Pending applications. Employers of highly-qualified foreign nationals with pending Residence Visa applications as of February 10, 2020 should increase foreign nationals’ salaries to comply with the new rule. Immigration applications that do not meet the new minimum salary may face additional scrutiny.
• Unaffected applicants. Locally hired foreign workers should earn at least the national minimum wage of EUR 635 per month, calculated over 14 payments, with additional monthly amounts for accompanying dependents.

 

Reminders on other requirements

• Benefits and allowances. As before, benefits and allowances may only be included in the minimum salary calculation for foreign workers on home employment contract. For those applicants, cost of living and housing allowances can be included in the calculation, provided that these are transferred to the foreign national’s bank account, paid monthly, taxable, processed via payroll, guaranteed and fixed.
• Currency. As before, employers are required to guarantee the salary in EUR regardless of payroll location and/or exchange rate fluctuations.

 

Background

• Portugal’s minimum salary increases. Salary increases between three and six percent are common for Portugal. Most European countries increase salary levels between one and five percent annually. The current high percentage increase follows from a steep increase in national average wages.
• Regional comparison of minimum salary calculations. European countries use a variety of factors to develop minimum salary levels for foreign workers, including but not limited to a) national minimum wage levels; b) amounts set in collective bargaining agreements; c) specific minimum salary levels for foreign workers set by the government; and d) a combination of complicated factors involved in a market salary determination, such as those based on characteristics of the position or individual, educational level, age and/or experience. This category can also involve comparisons against other of the mentioned factors and/or other considerations that a particular country's government finds relevant to a minimum salary determination. This last category is the most common category in Europe, and it requires the employer to conduct a relatively complex analysis to determine the appropriate salary level for each employee. The below map displays which European country applies which factors.

Looking ahead

Portugal introduced significant changes to the appointment scheduling system in October 2018 to attempt to reduce processing delays, but authorities have since delayed in implementing the legal changes in practice. Fragomen expects appointment delays and queues to persist as immigration officials continue to struggle to handle the high volume of immigration applications.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].