Ljubljana related

05 Jul 2019, 09:30 AM

STA, 4 July 2019 - The Ministry of Labour has come up with a calculation of the effect of the planned rise in the minimum wage in 2020 on the entire economy, establishing that, coupled with the elimination of bonuses from the minimum wage, it would cost the private sector EUR 197.1 million or 1.77% of the wage bill.

The calculation comes as a response from the government to the criticism from employer representatives about it having failed to make proper projections before adopting legislative changes raising the minimum wage.

In a recently published document, the ministry says that the effect of the raise of the gross minimum wage could be estimated relatively precisely based on data from previous years, while it is much harder to estimate the effect of the elimination of bonuses, as there are no relevant databases.

The ministry has established that the financial effect of the expected raise of the minimum wage in 2020 would be EUR 63.6 million or 0.57% of the wage bill, and the elimination of bonuses an additional EUR 133.5 million or 1.2% of the wage bill.

In commerce, where the number of employees on minimum wage is the highest, the added cost is expected to be EUR 37.3 million or 1.81% of the wage bill.

The ministry has assessed that the cumulative financial effects at the level of the entire economy will not be significant, while it is aware that they could be higher in industries with lower wages and a higher number of permanent bonuses.

It does not expect that a large number of companies will get into trouble considering that the total net profit posted by Slovenian companies last year increased by 16% and that the economic situation and the situation on the labour market are favourable.

Employer representatives are disappointed with the calculation, with Jože Smole, the secretary general of the Employers' Association, telling the STA that the analysis was very modest, featuring only three pages of text.

Smole is convinced that it does not take into account the complexity of the matter and is critical of the ministry for relying too much on the general data about profit and disregarding the possibility that companies which do not make profit would get into further trouble.

The Chamber of Commerce and Industry (GZS) reiterated in its response that it was against the changes to the minimum wage act, which it believes will hurt vulnerable individuals and companies the most.

The changes, which were passed last year without the approval of all social partners, raised the minimum wage this year from EUR 638 net to EUR 667 net, and next year it is expected to increase to EUR 700 net.

All our stories on pay in Slovenia are here

https://www.total-slovenia-news.com/tag/salary

05 Jun 2019, 13:15 PM

STA, 5 June 2019 - Slovenia ranks ninth among 22 EU member states that have statutory minimum wages in terms of the gross minimum wage rate. This year's increase of the country's figure to EUR 886.63 was among the modest ones, says the annual report on minimum wages in the EU and Norway, published by Eurofound on Monday.

The highest rate was registered in Luxembourg (EUR 2071.10), while Bulgaria has the lowest (EUR 286.33).

The report of the EU Agency for the improvement of living and working conditions placed Slovenia among the countries with the lowest share of minimum wage earners - 4.1%. The country ranked sixth in this category, with Czechia (2%) ranking the lowest and Poland ranking the highest (13.7%).

The survey registered big differences among all participating countries in this category, noting that in 2016 the average share of minimum wage earners in the EU was 7.2%.

Eurofund also pointed at considerable differences between the gross and net rates, saying that in Slovenia a share of 24.77% of the total minimum wage value is contributed to the social security system, including taxes and contributions. The country's share is among the higher ones in that respect.

The survey said that almost all countries, excluding Latvia, had increased the minimum wage rate since January 2018, with Slovenia raising it by 5.2% in nominal terms. The increase was quite modest, listing the country as third in the group of six countries with mid-level minimum wage rates - Slovenia ranked behind Malta (1.93%) and Portugal (3.45%).

The issue of minimum wage rate has been in the spotlight recently. The National Assembly adopted the Left's proposal for the minimum wage act in December 2018 despite employers' opposition, thus raising the rate.

The act stipulates that all allowances will be excluded from the statutory rates as of 2020 and will thus have to be paid on top. It also regulates the rate's lower and upper limit, setting the bar at at least 20% and top 40% above calculated minimum living expenses.

Employers argue that the adoption was rash and will have a detrimental effect on the whole society, while trade unions are willing to protect the act by any means necessary. Meanwhile, the government keeps insisting that the risks are manageable.

17 May 2019, 09:20 AM

STA, 15 May 2019 - Trade unions have announced they will fight with all available means what they believe are concealed attempts to change the law on minimum wage on demands from employers, as suggested by statements by government officials and debates held by employer representatives. The Labour Ministry denied that changes were in the works.

 

Speaking at a press conference in Ljubljana on Wednesday, representatives of the trade union confederations ZSSS and Pergam said that they were ready to push for a referendum on the minimum wage law if it was changed.

Slovenian’s minimum wage is currently  €886 a month

ZSSS president Lidija Jerkič said that there was an increasing number of signs lately that employer organisations wanted to prevent the provisions eliminating all bonuses from the minimum wage from entering into force in January 2020, as scheduled.

Jerkič said that this was suggested by the statements by PM Marjan Šarec that an agreement should perhaps be found on minimum wage law changes, as well as by Economy Minister Zdravko Počivalšek about employers warning him about the consequence of the exclusion of all bonuses from the minimum wage.

She also pointed to the recent round table debate of the Chamber of Commerce and Industry discussing the "domino effect of the minimum wage law" and certain statements by representatives of employees.

"If this is intended for testing the will of trade unions, let me reiterate clearly that we will not allow unilateral attempts at changing the legislation," Jerkič said.

If the law gets changed without the consent of trade unions, they will use all available means, including referendum, she said, adding that talks about a postponement of the exclusion of bonuses was out of the question.

Find out the average pay for various jobs in Slovenia here

The minority government's partner in the opposition, the Left, also sided with the trade unions and said it would help collect the needed signatures to have a referendum called.

Luka Mesec, the leader of the Left, said that profits were growing in "leaps and bounds", going from EUR 169 million in 2013 to EUR 4.2 billion last year.

Aljoša Čeč, the secretary general of Pergam, also said that employers were undermining social dialogue by trying to change the minimum wage legislation.

ZSSS vice-president Ladi Rožič said that, given the announcements that the Slovenian economy as a whole made EUR 4.2 million in net profit last year, claiming that the minimum wage would destroy the economic model was "unwise and unproductive".

The Labour, Family, Social Affairs and Equal Opportunities Ministry responded by saying that it detected no anomalies or derogations that would require a change in legislation.

It added that the minimum wage must be high enough to allow a decent living without the aid of social transfers.

All out stories on the minimum wage in Slovenia are here

30 Nov 2018, 10:20 AM

STA, 29 November 2018 - The first reading in the National Assembly of a bill raising the minimum wage by overhauling the way it is calculated indicated that the changes, proposed by the opposition Left with the tentative support of the coalition, are likely to be watered down somewhat during the adoption process.

While all parties agreed the minimum wage, currently at EUR 638 net, was too low, they mostly found issues with the bill.

The motion, coming after basic welfare allowance went up from EUR 297 to EUR 393 earlier this year, would increase the minimum wage by roughly 5% in 2019 and just as much in 2020. In 2021 it introduces a calculation formula that would keep it 20% above minimum living costs.

The main objection raised on Thursday by most coalition parties and the government as it held a correspondence session had to do with to the timeline of the raise, which is closely linked to the exclusion of individual bonuses and allowances from the calculation of the minimum wage.

"A predictable business environment is crucial for the economy in Slovenia, which is why the minimum wage needs to be raised in a well though-out, predictable and gradual way. When considering predictability, it is inappropriate that changes adopted in December 2018 already enter into force in January 2019," the government wrote.

All our stories on Slovenia’s minimum wage are here

It highlighted the need to phase out the bonuses - employers have been including various bonuses into the minimum wage - gradually, arguing "this would give the public as well as private sector enough time to adjust".

While asserting it was in favour of the goals of the proposal, the government reached out to employers, who have been complaining the changes were drafted without social dialogue.

It said that "it would make sense when searching for the most appropriate solutions in the next stages of the legislative procedure to consider social dialogue to the highest extent possible and adjust the enforcement's dynamics for individual solutions".

The proposal in general was rejected only by the opposition New Slovenia (NSi), whose Jožef Horvat said the rise would disrupt the balance of the wage scale, and by the opposition Democrats (SDS) whose Karmen Furman identified a misguided wage policy combined with a misguided social transfers policy as the reason for this disruption.

The two parties also highlighted the absence of social dialogue, while Jerca Korče of the senior coalition Marjan Šarec List (LMŠ) said the Economic and Social Council had had a number of opportunities to discuss a higher minimum wage.

"I have the feeling that the time will never be right for this debate," she said, also rejecting accusations that an effort was under way to revive "an outdated social model" and to meddle in the economy.

"The state has to see the whole picture, which is comprised of both business and the recipients of the minimum wage. Because the wage did not increase on its own, politics assessed it was time to intervene," she said.

Joining the Left in supporting the changes in their current form was the opposition National Party (SNS), whose Dušan Šiško was however simultaneously critical of the raised welfare allowance.

In the end, the bill was endorsed in a unanimous vote with the SDS and NSi abstaining.

Related: Find out the average pay for various jobs in Slovenia

08 Nov 2018, 11:50 AM

STA, 7 November 2018 - Employers were quick to condemn the planned overhaul of the minimum wage law, especially the way it is to be pushed through parliament. The Employers' Association stressed that any changes to minimum wage should be harmonised with social partners at the country's main industrial relations forum, the Economic and Social Council.

The Left presented on Wednesday a proposal to overhaul the way minimum wage is determined. The opposition party that acts as a partner to the minority government proposes raising the minimum wage to EUR 667 next year and to EUR 700 in 2020, before a new formula to calculate the wage is introduced in 2021.

Related: Proposal to raise Slovenia’s minimum wage from €638.42 net to €700 by 2020

The Employers' Association is unhappy with the way the bill was presented, "bypassing any dialogue with social partners". According to a press release, employers have experience with this practice, which has had serious consequences for companies.

Determining the minimum wage must be a matter of discussions and harmonisations among social partners, but the new bill has not even been presented to the Economic and Social Council, the association said.

Even stronger reaction came from the Chamber of Commerce and Industry (GZS), the country's biggest trade association, which called the proposal dangerous and expressed "shock" that the coalition should have backed it.

"It's trampling international agreements on social dialogue, something that government officials committed to at the first session of the Economic and Social Council over a week ago."

The GZS noted that only over a week ago it had "received a clear assurance from the prime minister that any change to the minimum wage would be agreed with the social partners".

slovenia's minimum wage.png

The figures in the chart show the gross minimum wage. Data: Eurostat

The Left's leader Luka Mesec said today that the party had agreed with Prime Minister Marjan Šarec for the bill to be discussed at the Economic and Social Council.

Nevertheless, employers are unhappy: "It is the middle of November, and companies and employers still do not know what kind of arrangement awaits them next year," the Employers' Association said.

The GZS said that most large companies would not feel the planned rise in the minimum wage, but that the increase would hurt companies where value added per employee was below EUR 20,000 and which employed 70,000 people.

The chamber argued that politics was interfering with the minimum wage all the time even though the share of those receiving it had been falling steadily and that even though the minimum wage in Slovenia was one of the highest in the EU.

"Each rise in the minimum wage generates more employees who earn minimum wage because it includes all those who had been in higher bracket until then," GZS said.

According to its data, average gross pay in the country has increased by 11% since 2010, while the minimum wage has risen by 41%.

The Chamber of Trade Crafts and Small Business (OZS) meanwhile said that it strives not only for raising the minimum wage but also for workers to have decent wages.

However, the state should cut labour costs to enable the workers to get higher net wages. "The difference between the gross and the net pay is too big. The state will get the most from raising wages," OZS head Branko Meh was quoted in a press release.

07 Nov 2018, 16:50 PM

STA, 7 November 2018 - The Left has tabled a minimum wage bill determining a new formula for setting the minimum wage as of 2021, and the rates for 2019 and 2020. The legislation has already been endorsed in principle by all coalition parties.

Under the proposal, the minimum wage, which currently stands at EUR 638.42 net, will rise to EUR 667 next year and to EUR 700 in 2020.

The minimum wage is currently determined by the minister in charge of labour based on inflation and, optionally, other macroeconomic trends.

Under the new formula to enter into effect as of 2021, the minimum wage will have to exceed the minimum living costs by at least 20%, which would currently net workers EUR 736 a month, the Left's leader Luka Mesec told the press on Wednesday.

According to him, the formula ensures that "all those who work eight hours a day will no longer scrape by at the poverty line, as they have so far".

The Left also wants all the bonuses determined by law and collective bargaining agreements excluded from the minimum wage and paid separately as of 2019, but the exact date is yet to be harmonised.

The Ministry of Labour, Family, Social Affairs and Equal Opportunities proposes 2020 as the year for excluding the bonuses.

"Bonuses will be excluded, it's a fact. The question is just what the most appropriate date is," Mesec said.

While all coalition parties have endorsed the bill, the Modern Centre Party (SMC) yesterday voiced some concerns, including about using the new formula.

But Mesec dismissed these concerns, saying that "apparently they are not in line with their own ministry, which has backed the formula in its expert opinion".

According to him, the ministry said in its opinion that the formula determines a sensible balance between the income of working people and the income of inactive population.

Mesec also refuted the SMC's concern that the bill was not discussed with social partners, noting that it had been agreed with the prime minister the bill would be discussed at the Economic and Social Council, the country's main industrial relations forum.

Addressing concerns about the impact on the budget, Mesec added that it is "virtually neutral, because higher pay in public and private sectors mean more tax receipts."

The Labour Ministry's data show that around 42,000 people, of which nearly 35,000 are in the private sector, currently receive minimum wage.

However, the rise of the minimum wage in January as proposed in the bill will in fact affect around 70,000 workers, Mesec said.

Related: Slovenia Ranks 7th in EU for Exports as Share of GDP, 8th in Minimum Wage

Significant minimum wage increases planned in new bill (adds)

 reaction from SDS in final 4 para

Ljubljana, 7 November - The Left has tabled a minimum wage bill determining a new formula for setting the minimum wage as of 2021, and the rates for 2019 and 2020. The legislation has already been endorsed in principle by all coalition parties.

Under the proposal, the minimum wage, which currently stands at EUR 638.42 net, will rise to EUR 667 next year and to EUR 700 in 2020.

The minimum wage is currently determined by the minister in charge of labour based on inflation and, optionally, other macroeconomic trends.

Under the new formula to enter into effect as of 2021, the minimum wage will have to exceed the minimum living costs by at least 20%, which would currently net workers EUR 736 a month, the Left's leader Luka Mesec told the press on Wednesday.

According to him, the formula ensures that "all those who work eight hours a day will no longer scrape by at the poverty line, as they have so far".

The Left also wants all the bonuses determined by law and collective bargaining agreements excluded from the minimum wage and paid separately as of 2019, but the exact date is yet to be harmonised.

The Ministry of Labour, Family, Social Affairs and Equal Opportunities proposes 2020 as the year for excluding the bonuses.

"Bonuses will be excluded, it's a fact. The question is just what the most appropriate date is," Mesec said.

While all coalition parties have endorsed the bill, the Modern Centre Party (SMC) yesterday voiced some concerns, including about using the new formula.

But Mesec dismissed these concerns, saying that "apparently they are not in line with their own ministry, which has backed the formula in its expert opinion".

According to him, the ministry said in its opinion that the formula determines a sensible balance between the income of working people and the income of inactive population.

Mesec also refuted the SMC's concern that the bill was not discussed with social partners, noting that it had been agreed with the prime minister the bill would be discussed at the Economic and Social Council, the country's main industrial relations forum.

Addressing concerns about the impact on the budget, Mesec added that it is "virtually neutral, because higher pay in public and private sectors mean more tax receipts."

The Labour Ministry's data show that around 42,000 people, of which nearly 35,000 are in the private sector, currently receive minimum wage.

However, the rise of the minimum wage in January as proposed in the bill will in fact affect around 70,000 workers, Mesec said.

In response to the proposal, the opposition Democratic Party (SDS) said the current system of the minimum wage, base pay and collective bargaining agreements was opaque, proposing a minimum hourly rate instead.

The party filed for an emergency session of the parliamentary Labour Committee, proposing it to call on the government to conduct, together with social partners, an analysis of what the introduction of such an hourly rate would mean and report back to the committee within 30 days.

The SDS also proposes for the committee to call a public debate on the proposal within 30 days, inviting representatives of employers and employees and other persons that could offer useful information.

The party argues that under the current system "workers never know when their labour rights are violated or cannot or would not afford lengthy court proceedings". They believe an hourly rate would be fairer.

21 Aug 2018, 10:49 AM

STA, 20 August 2018 - Gradually raising the minimum wage, taking on precarious forms of employment while also allowing enough flexibility, and encouraging later retirement will be among the key labour market priorities of the emerging coalition. 

20 Jun 2018, 09:16 AM

STA, 19 June 2018 - Slovenia's exports of goods and services last year matched 82% of the country's GDP, which puts the country 7th among EU countries by exports as percentage of GDP. Imports represented nearly 73%, which ranks Slovenia 10th in the EU. 

22 May 2018, 10:33 AM

STA, 22 May 2018 - Social affairs and labour market rank prominently in many election manifestos. Most of the parties running in the 3 June election support an increase in the minimum wage and several propose fixing a maximum ratio between the highest and lowest pay. A few would also try a universal basic income (UBI). 

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