Slovakia: latest working life developments Q2 2018
An increase in wage supplements, easier access for people from countries outside the EU to join the Slovak labour market and new legislation for social enterprises are the main topics of interest in this article. This country update reports on the latest developments in working life in Slovakia in the second quarter of 2018.
Increase in wage supplements for certain types of work
An amendment to the Labour Code was made on 1 May, which will increase wage supplements (Act No. 68/2018). Wage supplements for night work increased from 20% to 30% of the hourly rate of the minimum wage, and to 35% for hazardous jobs. The supplement for working during a public holiday increased from 50% to 100% of the employee’s average wage. Some employers criticised the new supplements, which can significantly increase employers’ wage costs, for example in situations where night work is essential. Companies with fewer than 20 employees and where most work is done at night can agree on lower supplements (at a minimum of 25%) in company collective agreements or, where there are no trade unions, in agreements with employees. A new wage supplement was also introduced for weekend work. The wage supplement for working on Saturdays and Sundays is 25% and 50% of the hourly minimum wage, respectively. In companies where weekend working is typical, it is also possible to agree on lower supplements, but no lower than 20% and 40% respectively. According to the law, the higher wage supplements will be implemented in 2019.
Easier access to the labour market for foreign workers
An amendment to employment services law (Act 64/2018, amending Act 5/2004) was adopted by parliament and entered into effect on 1 May 2018. The amendment responds to recent significant changes in the labour market: after almost 25 years, as a result of steady economic growth, employment has increased and unemployment significantly decreased – from 12.4% in the first quarter of 2015 to 7.1% in the first quarter of 2018. However, in the manufacturing industry and in services, employers report an increasing shortage of workers. The issue was discussed at the tripartite Economic and Social Council on 2 December 2017 and the tripartite agreed to simplify conditions of employment for nationals from outside the EU – for instance, employers do not need to report vacancies to the employment office. It is assumed that workers will come mainly from the Balkan countries, in professions where there is shortage of qualified labour and in districts with a less than 5% average registered unemployment rate.
- Statistical Office of the Slovak Republic: Unemployment in the 1st quarter of 2018 , 7 June 2018
New legislation on social economy
A new act on social economy and social enterprises (Act No. 112/2018), which was adopted by parliament on 13 March 2018, came into effect on 1 May 2018. This was the second time since 2008 that an attempt had been made to support the employment of disadvantaged groups of people, but the first time a special act was adopted. Previously, in a social enterprise, disadvantaged employees had to make up at least 30% of the staff, and 30% of the profits had to be re-invested in the improvement of the working conditions of all employees. But in practice, state subsidies were often misused for practical reasons. After almost 10 years, social partners at the tripartite Economic and Social Council agreed on a new regulation. According to the Confederation of Trade Unions of the Slovak Republic (KOZ SR), the regulation will be an effective tool for promoting employment in less developed regions, the employment of disadvantaged people, and for social housing, which needs significant improvement. In future, disadvantaged and vulnerable people should make up a significant share (at least 30%) of the staff of a social enterprise. To curtail the misuse of the state subsidies, the act also defines strict conditions for state support and control.
The next increase of the wage supplements will be implemented from 1 May 2019. By simplifying the conditions for employing people from countries outside the EU, the government has responded to employers’ increasing demands.