MADRID—Spain's central bank called for a suspension of the minimum wage in selected cases, saying a year-old overhaul of labor laws had made the economy more competitive but failed to encourage hiring.

The Bank of Spain's recommendation, though not binding on the conservative government, reflects growing concern among policy makers about the country's 27% unemployment rate. More than six million people are out of work in the second year of a recession, about one million more than in early 2012 when the revised laws gave employers...