Minimum wage increased without tripartite agreement

From 1 October 2002, Slovakia's statutory monthly minimum wage has been increased by 13.2 % - from SKK 4,920 to SKK 5,570. The government determined the amount of the new minimum wage because the social partners were unable to agree on the issue in tripartite consultations. The minimum wage now represents 40.68 % of the estimated average monthly wage.

By Regulation No. 514 of 21 August 2002, the Slovakian government has set the minimum hourly wage at SKK 32 (for each hour worked by employees) and minimum monthly wage at SKK 5,570 (for employees remunerated on a monthly base). This Regulation took effect on 1 October 2002.

When determining the minimum wage, the government followed the procedure laid down in the current minimum wage legislation (Article 6a of Act No. 90/1996 in the Collection of Laws, as amended), whereby:

  • the minimum monthly wage is adjusted in line with the relevant'multiplier' of the average monthly wage of employees in SKK, which is determined by the Statistical Office for the previous year, and an agreed'coefficient';
  • each year, by 31 July, the state and the social partners’ representatives should agree on this coefficient on a basis of a proposal made by the Ministry of Labour, Social Affairs and Family. The proposal is submitted to the tripartite Council for Economic and Social Concertation (Rada hospodárskej a sociálnej dohody, RHSD), always by 15 June. The coefficient is determined by applying the rule that the monthly minimum wage is to be higher than the sum of the'adjusted subsistence minimum'- ie the legal minimum subsistence income for an adult - plus the relevant tax and insurance contributions (compulsory health insurance, sickness insurance, pension insurance and unemployment insurance); and
  • if the social partners are not able to reach an agreement on the coefficient by 31 July, the government stipulates the amount of the minimum wage and issues the relevant regulation (always by 1 October).

In accordance with these rules, the Ministry of Labour, Social Affairs and Family presented a proposal for the coefficient at the government's meeting on 5 June 2002. The proposal contained three alternatives (coefficients of 0.43, 0.44 and 0.45) which responded to monthly minimum wages of SKK 5,320, SKK 5,450 and SKK 5,570 respectively. The government submitted the proposal to a meeting of the RHSD.

The Council did not come to an agreement on the coefficient after discussions held on 28 June and 26 July 2002. The Confederation of Trade Unions (Konfederácia odborových zväzov, KOZ SR) requested the government to adjust the minimum wage according to a coefficient of 0.50, which represented SKK 6,190. The article of the Slovak Constitution which deals with the minimum wage issue states that employees have a right to remuneration which enables them to achieve a dignified living standard, and this was one of the most important arguments of the KOZ SR. By contrast, the Federation of Employers´ Associations (Asociácia zamestnávateľských zväzov a združení, AZZZ SR) requested lower minimum wage levels (SKK 5,320 or SKK 5,450). The AZZZ SR stated that these proposals were in line with the current economic possibilities. Because there was a lack of an agreement between the government and the social partners by 31 July 2002, the government decided on a minimum wage of SKK 5,570.

The new minimum wage represents an increase of 13.2 %. As of 1 October 2002, the gap between the minimum wage and the adjusted subsistence minimum (SKK 4,596 as of 1 July 2002) has increased from SKK 324 to SKK 974. At the same time, the minimum wage as a proportion of the estimated average nominal monthly wage has increased from 39.78% (SKK 4,920 compared with SKK 12,365) in 2001 to 40.68 % (SKK 5,570 compared with SKK 13,690) in 2002. The amount of the individual net minimum wage (for a single person without children) is now SKK 4,686, and this net minimum wage now represents 119.2% of the current individual subsistence minimum (SKK 3,930), compared with 109.8% in 2001.

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