Andorra GPS Proposes CPI-Linked Automatic Wage Adjustments

The Social Democratic Parliamentary Group (GPS) has submitted a proposal to the General Council urging the government to establish a legal mechanism for automatically adjusting all wages in line with changes in the consumer price index (CPI).

Registered on 27 January 2026, the measure aims to protect workers' purchasing power amid persistent rises in living costs. GPS lawmakers highlighted that while minimum wage increases have been approved in recent years, most salaries lack any mandatory review process and rely solely on employer discretion or individual negotiations.

This gap, they argued, leads to gradual erosion of economic capacity and wage compression, where pay initially above the minimum gradually converges toward it over time. The group warned of a growing risk that more workers could end up on minimum wage not due to improved conditions, but because intermediate salaries fail to keep pace.

To address this, the proposal calls on the government to submit a bill within six months to amend labour laws. The system would mandate annual, compulsory wage updates effective from 1 January each year, based on the previous year's official CPI figure.

The executive would also be required to report annually to the General Council on the mechanism's implementation and the minimum wage's alignment with living costs.

The initiative was led by GPS councillors Susanna Vela Palomares, Pere Baró Rocamonde, and Laia Moliné Cintas. It now enters the parliamentary process in Andorra la Vella.