Social partners fail to agree on minimum wage increase
On 1 October 2003, the monthly minimum wage in Slovakia was increased by 9.2%. The government unilaterally declared the increase because the social partners were unable to reach agreement through tripartite concertation. The minimum wage now represents 41.4% of the average wage. The trade unions, however, would like to see it rise to at least 60% of the average.
Slovak government Regulation No. 400 of 30 September 2003 (effective from 1 October 2003) stipulates a new minimum wage of SKK 35 per hour or SKK 6,080 per month. The regulation of the minimum wage and its determination by government are based on the Minimum Wage Act 1996 (No. 90). In compliance with this law, the government must set the minimum wage level annually (not later than 1 October). The minimum wage increase is calculated by multiplying the average monthly nominal wage recorded by the Statistical Office for the previous calendar year by a'coefficient of adjustment' (SK0210101N).
The Ministry of Labour, Social Affairs and the Family (Ministerstvo práce, sociálnych vecí a rodiny Slovenskej republiky,MPSVR SR) submitted a draft proposal to the Tripartite Economic and Social Concertation Council (Rada hospodárskej a sociálnej dohody Slovenskej republiky,RHSD) (SK0307102F) to the effect that the coefficient should be 0.44 from 1 October 2003, corresponding to a monthly minimum wage of SKK 5,950. The RHSD did not reach agreement on the coefficient at meetings held in July 2003. The Confederation of Trade Unions of the Slovak Republic (Konfederácia odborových zvazov Slovenskej republiky,KOZ SR) asked the government to consider adjusting the minimum wage level by a coefficient of 0.60, bringing it up to SKK 8,110. The Federation of Employers' Associations of the Slovak Republic (Asociácia zamestnávatelských zvazov a zdruzení Slovenskej republiky,AZZZ SR), however, agreed with the Ministry’s proposal and asked the government to take employers' economic situation into account when determining the minimum wage.
At an RHSD meeting held on 14 July 2003 the Ministry submitted a compromise proposal, marginally increasing the adjustment coefficient to 0.45, giving a minimum wage of SKK 6,080. AZZZ SR agreed to this compromise but KOZ SR did not. KOZ SR argued that living costs were very high as a result of price deregulation and increased indirect taxes, not to mention new healthcare charges introduced in 2003. The KOZ SR demands included a minimum monthly wage set at 50% of the average wage (ie SKK 6,760) in 2003, rising to 55% in 2004 and to 60% in 2005. KOZ SR's demands were aimed at easing the difficult economic and social situation and supported by a number of protests, including a one-hour warning strike (SK0312102N). According to the 1999 Act on Economic and Social Partnership (No. 106) a document submitted to the RHSD meeting cannot be discussed more than twice. The social partners did not agree on the new minimum wage increase by 31 July and therefore this responsibility passed to the government in line with the Minimum Wage Act 1996.
The new minimum wage is thus set at SKK 6,080 per month, a 9.2% increase on the previous year. This represents 41.36% of the estimated average monthly wage for 2003 (SKK 14,700); it also means that the monthly minimum wage is now SKK 1,127 higher than the'adjusted subsistence minimum' (ie the subsistence minimum for an adult, plus sums related to taxes and insurance contributions) - an increase of SKK 153 from the former difference of SKK 974. The net minimum wage of a single person without children has risen by 8.6%, from SKK 4,693 to SKK 5,095 a month; this means that the net minimum wage is now 121.0% of the subsistence minimum for a single person (SKK 4,210 from 1 July 2003).