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MINIMUM WAGE

Term designating the amount of pay/remuneration which employers are obliged by law to pay their employees and which may not be reduced by collective agreement or under an individual contract of employment. In Portugal, the fixing and updating of a national minimum wage began in 1974 and is nowadays regulated by Decree-Law No. 69-A of February 9, 1987, which has undergone various amendments. The minimum wage (in legal terminology "retribuiçÃo mínima mensal garantida", i.e . guaranteed minimum monthly pay) is guaranteed to all employees regardless of the sector in which they are employed, but is lower for domestic work . Under Article 59(2a) of the Portuguese Constitution, its amount must be updated annually; its adjustment must be pegged to the criteria of incomes and prices policy and the degree of development of economic sectors, and aimed towards the reduction of existing differentials and gradual standardization. The amount fixed for 1995 is 52,000 escudos per month (45,700 escudos for domestic work).

For the purposes of establishing whether or not an employer is paying the minimum wage, the law identifies components of pay which are included in the concept of guaranteed minimum monthly pay, and those which are excluded. Those included are: productivity bonuses; sales commission and other output-related premiums; subsistence expenses and meal and travel allowances insofar as they exceed those set for the public service; and bonuses which may be regarded as forming an integral element of pay. In addition, the value of food and housing is included, as well as other payments in kind which are classed as pay (see pay in kind ). All other allowances, premiums, bonuses and other payments paid on an occasional or monthly basis are excluded. Certain reductions in the amount of the minimum wage are permitted in the case of particular categories of employee, such as employees under the age of 18, those undergoing forms of training and those whose capacity to work is reduced. These reductions may not, however, violate the principle of equal treatment (see pay/remuneration:principle of equal treatment ).

The statistics available show that the overall percentage of employees in Portugal who receive only the minimum wage is fairly small: 5.4 per cent., with the figure fluctuating between 1.2 per cent. in the banking and insurance sector and 8.5 per cent. in the retail trade and hotel and catering sector. Employees in small enterprises (with four or fewer employees) make up 25.4 per cent. of all those receiving the minimum wage, but the distribution between men and women is roughly equal, both comprising around 50 per cent. of the overall total.

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