Minimum Wage Increased

The situation

• Minimum wage. Effective January 1, 2020, the minimum monthly wage in Portugal increased to EUR 635, calculated over 14 payments, up 5.8 percent from 2019.
• Additional funds for dependents. Foreign nationals travelling with family members must receive an additional EUR 317.50/month for an accompanying spouse or child over 18 and additional EUR 190.50/month per accompanying child under 18, both calculated over 14 payments.
• Exchange rate. The exchange rate at the time of publication of this alert is 1 EUR to 1.11 USD.

 

A closer look

• Existing employees. Employers of foreign nationals currently under work authorization must increase foreign nationals’ salaries to comply with the new rule.
• Initial and renewal applications. Employers of foreign nationals seeking to obtain or renew work authorization on or after January 1, 2020 must increase foreign nationals’ salaries to comply with the new rule. Immigration applications that do not meet the minimum salary will be refused.
• Pending applications. Employers of foreign nationals with pending work authorization applications as of January 1, 2020 must increase foreign nationals’ salaries to comply with the new rule. Immigration applications that do not meet the minimum salary will be refused.

 

Reminders on other requirements

• Benefits and allowances. As before, for foreign workers on home employment contract, 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.
• Partial payment. As before, salary cannot be reduced based on the number of working days spent in Portugal except in the first and last month of employment or assignment.

 

Background

Salary increases between three and six percent are common for Portugal. Most European countries increase salary levels between one and five percent annually.

Portugal introduced significant changes to the appointment scheduling system in October 2018, but authorities have since struggled to implement the legal changes in practice. Notably, the online residence permit application system has not yet been created.

Looking ahead

Fragomen expects appointment delays and queues to persist as immigration officials continue to struggle to handle the volume of 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].