Employers reject proposed increase in minimum wage
The minimum wage in Slovakia has increased almost every year since 1993 and is currently €337.70 per month. During negotiations between unions and employers on the 2014 minimum wage, the unions have demanded an increase of €27, but employers have argued that such a large rise will harm employment in some industries. The government is likely to make the final decision, and the Ministry of Labour, Social Affairs and Family has proposed an increase of less than €10, to €345.90.
Current minimum wage
The minimum wage level comes into effect on 1 January each year and is valid for the full calendar year. It applies to all employees, branches of industry and regions. In 2013, the minimum wage was set at €337.70 per month and €1.94 per hour. Since 1 January 2013, the minimum wage has also applied to workers who perform work externally for employers by agreement.
Where the employee’s salary for a particular month is lower than the equivalent minimum hourly wage, the employer must make up the difference. The employer is not allowed to include in this calculation wages or compensation for overtime work, compensation for work undertaken during public holidays, compensation for night work, wages paid for any period of inactivity during time spent on standby in the workplace or wage compensation for performing difficult work.
The minimum wage plays an important role as, in the absence of a collective agreement, it fixes the minimum rate that employers must pay. The minimum rate is defined by the Labour Code and is determined by the degree of difficulty of the job in question (SK1110029I). Determining the minimum wage necessitates long discussions between the social partners and the government.
The political orientation of the government determines whether it is more inclined to agree to the demands of the trade unions, or to those of the employers. For instance, during adoption of amendments to the Labour Code in 2011, the government accepted employers’ demands and agreed to abolish indexation of the minimum wage level according to the degree of difficulty of the work. However, this was not approved by parliament (SK1105019I).
The employers and the trade unions have not been able to reach agreement on the level of the minimum wage for some years, and as a result the government has unilaterally decided the rate.
Minimum wage for 2014
Representatives of the trade unions and the employers took part in negotiations on the minimum wage level for 2014, but again had not reached agreement by the statutory deadline of 15 July 2013. Negotiations between the social partners and government representatives took place at the meeting of the tripartite Economic and Social Council (HSR) on 12 August 2013 and, in accordance with Act No. 667/2007 Coll. on the minimum wage, representatives of the social partners and the government submitted the following proposals.
- The National Union of Employers (RÚZ SR) and the Federation of the Employers’ Associations (AZZZ SR) proposed that the minimum wage be left at the current level of €337.70.
- The Confederation of Trade Unions (KOZ SR) proposed that the minimum wage be increased to €364.70.
- The Ministry of Labour, Social Affairs and Family SR (MPSVR SR) proposed that the minimum wage be increased to €345.90. The 2.4% rise, in line with the law, corresponds to the annual growth of the average monthly nominal wage in the Slovak Republic, based on data from the Statistical Office (ŠÚ SR) for 2012.
Employers' representatives argue that the current economic situation cannot justify a rise in the minimum wage and might particularly threaten jobs in, for example, the textile industry and in services.
Trade unions, however, argue that the current minimum wage does not protect employees against poverty and they demand that the net minimum wage should reach at least the poverty threshold for 2011 (€315).
The HSR took into account the submitted proposals. If the social partners can still not agree, MPSVR SR will submit its proposal for the 2014 level of the minimum wage to the government.
Ludovit Cziria, Institute for Labour and Family Studies