The Council of State suspends the Decree that set the 2026 minimum wage and orders a temporary substitute setting | Jurisprudential Alert

Guerrero Ruiz | Legal
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Impacts on horizontal property, indexations and state contracting

On February 12, the Second Section – Subsection A of the Council of State decreed the provisional suspension of Decree 1469 of 2025 , through which the current legal monthly minimum wage (SMLMV) for 2026 had been established at $1,750,905, equivalent to an increase of 23%.

The decision did not simply suspend the administrative act. The Court expressly ordered the National Government to issue a temporary substitute determination , precisely to avoid a regulatory vacuum while the annulment claim is resolved on its merits.

1. What motivated the precautionary suspension?

The preliminary analysis by the Court identified possible violations of Article 8 of Law 278 of 1996 and of constitutional jurisprudence (especially ruling C-815 of 1999 ).

The questions focus on three critical aspects:

The way in which economic variables such as inflation, productivity, GDP and inflation target were weighted.
The incorporation of the concept of "living wage" based on ILO studies, without prior regulatory development.
The level of technical motivation required when the Government unilaterally sets the minimum wage, after the failure of tripartite consultation.

For the Council of State, both the fumus boni iuris (appearance of good right) and the periculum in mora (danger due to delay) were configured given the structural and indexation nature of the SMLMV in the Colombian legal system.

2. What does the substitute fixing order entail?

This is an exceptional aspect of the ruling. By ordering a temporary administrative measure, the Council of State sought to guarantee the continuity of labor relations, avoid uncertainty in productive sectors and the market in general, and prevent massive economic effects that could hardly be reversed.

In other words: there will be no regulatory vacuum .

3. Effects on obligations indexed to the minimum wage

The minimum wage serves as a reference unit in multiple areas of the legal system. Therefore, the precautionary suspension has immediate and far-reaching consequences.

3.1. Horizontal property

Under Law 675 of 2001, it is common for administration fees to be expressed in SMLMV (Minimum Monthly Legal Wage), and annual budgets to be projected based on the annual increase in the minimum wage. With the suspension of Decree 1469:

The 23% increase cannot be applied automatically .
The budgets approved in January will need to be reviewed.
Conflicts could arise from payments settled based on a suspended value .

3.2. Fines and administrative penalties

A large number of regulations establish monetary penalties expressed in minimum monthly legal wages (SMLMV ). The precautionary decision directly affects:

∙ Sanctioning processes in progress .

∙ Settlements of fines already imposed but not yet enforceable .

• Amount thresholds that determine competencies or procedures.

3.3. Social Security

The minimum wage determines the minimum contribution base , the amount of disability and leave benefits , and contributions to the Pension Solidarity Fund .

The modification of the expected minimum wage alters the revenue projections and forces adjustments in the financial planning of the system .

4. Implications for government procurement

This is probably one of the sectors most sensitive to the decision.

4.1. Contracts with values referenced to SMLMV

In public procurement, it is common for the value of contracts to be expressed in minimum wages, for guarantees, fines and penalty clauses to be calculated with that reference, for the enabling requirements of financial capacity to be measured in SMLMV (Minimum Monthly Legal Wage), and for official budgets to be estimated based on the annual increase of the minimum wage .

The suspension requires reviewing values stated in tender specifications, adjusting the amount of contractual guarantees, re-evaluating fines under discussion or pending settlement, and recalculating costs in works or services contracts where the labor component is significant.

4.2. Economic equilibrium of the contract

In contracts for successive or prolonged work , a 23% increase could have justified claims for longer on-site work or additional labor costs . The precautionary suspension radically changes that scenario.

Indeed, state entities will need to analyze potential contractual claims arising from uncertainty, recalculate projected budget impacts, and review the risk matrices associated with each contract.

4.3. Budget planning

The minimum wage has a direct impact on the payroll of public employees, contracts for the provision of personal services, social programs with thresholds defined in SMLMV, and the determination of transfers to territorial entities .

This decision requires immediate adjustments in the financial planning of national and territorial entities.

5. Substantive legal reflections

Beyond its immediate effects, this provision has structural implications:

It reaffirms that the presidential power to set the minimum wage is not discretionary, but regulated .
It substantially raises the standard of technical motivation when there is no agreement.
It establishes a precedent on precautionary measures with positive regulatory content (not just suspensive).
This demonstrates that the minimum wage is not just a labor variable, but a cross-cutting instrument of public policy and economic regulation.

Conclusion

The suspension of Decree 1469 of 2025 goes beyond labor issues. Its effects extend to horizontal property ownership, the sanctions regime, social security, government contracting, and tax planning .

The message from the Council of State is clear: when an administrative act has a structural impact, its technical justification must be solid, verifiable, and in accordance with the law .

From Guerrero Ruiz | Legal we will closely follow the issuance of the substitute decree and its regulatory implications.

Download here the order that provisionally suspends the effects of Decree 1469 of 2025 .