Ljubljana related

20 Feb 2020, 12:39 PM

STA, 19 February 2020 - Representatives of tourism companies and of tourism and hospitality trade unions signed on Wednesday an agreement involving a two-stage increase of the lowest basic wages by a total of 10.25%.

The annexe to the collective bargaining agreement for the sector envisages a 5% increase as of 1 March and 5.25% more as of 1 July, as well as a EUR 100 increase in the holiday allowance compared to 2019 to EUR 1,150.

Commenting on the rise, the Tourism Chamber pointed out social partners in the sector had already agreed on a 4% pay increase in 2019.

Also, the minimum wage increased across the board in Slovenia from EUR 886.63 to EUR 940.58 gross, while bonuses have also been excluded from the minimum wage, which is the wage of a large share of tourism and hospitality workers.

According to the chamber, representatives of Slovenian tourism companies have thus shown they are aware of the need to additionally motivate workers in the sector, since they are the key to increasing quality.

The trade unions have for some time been warning about continuing issues, including a lack of staff, chaotic working time, poor working conditions and low pay.

They argue these reasons contributed to the lack of interest for the profession and its increasing dependence on foreign workers and students. This is however at odds with the strategy for the development of Slovenian tourism, which aims to increase quality and prices.

17 Feb 2020, 12:02 PM

STA, 17 February 2020 - Average monthly take-home pay in Slovenia increased last year by 3.7% in nominal terms and by 2.1% in real terms to EUR 1,133.50, fresh data from the Statistics Office show.

Average gross monthly pay for 2019 amounted to EUR 1,753.84, up 4.3% in nominal terms and up 2.7% in real terms compared to average monthly earnings in 2018.

Gross earnings in the private sector rose by 3.9% and those in the public sector by 5.4%, rising as much as 6.5% in the general government sector.

The growth in the public sector was largely due to a new pay deal negotiated in late 2018.

The highest monthly gross earnings for 2019 were paid in electricity, gas, steam and air conditioning supply; at EUR 2,628.55.

At 8.9%, the highest increase in pay was recorded in the public administration and defence, compulsory social security.

December pay amounted to EUR 1,855.25 gross, a decrease of 2.2% in nominal terms and 2% less in real terms than November pay. The drop is due to performance and Christmas bonuses paid out in November.

Net pay for December amounted to EUR 1,214.93, 1.6% lower nominally and 1.4% lower in real terms than earnings for November.

23 Jan 2020, 10:04 AM

STA, 22 January - The Public Administration Ministry is working on changes to the system of performance-based remuneration, also to make jobs in the public sector more attractive to experts and for young people who are increasingly looking for opportunities in the private sector. It also wants to change the system of promotion.

The plan was discussed at an international conference in Ljubljana on Wednesday, with Minister Rudi Medved noting that the austerity measure freezing performance bonuses in the public sector would expire in July.

Medved said that it would be ideal if the proposed changes were implemented by then or, if not, in the autumn at the latest, after they were tested with a pilot project and a consensus was reached with public sector trade unions.

The basic solutions were presented by Peter Pogačar, who noted that the current system allowed for someone to have up to 48% higher wage than another employee who did the same job.

The differences are not a consequence of the performance, but seniority, explained the head of the ministry's public sector directorate.

According to him, the government wants to abolish annual evaluation as the basis for promotion for a total of ten wage brackets. Under the proposal, promotion would be automatic over a longer period of time, up to five wage brackets.

Variable rewarding of performance would be introduced, and considerably more funds would be earmarked for this purpose, with an individual being able to receive performance bonus equalling up to 30% of their base pay.

Minister Medved said that one of the reasons was that the public sector was already facing problems with attracting experts, for example in digitalisation.

Wages in the public sector are not high, and the sector has become unattractive for young people, who are looking for opportunities in the private sector as the economy is growing and good job opportunities are popping up, he added.

For this reason, the plan is to make the system more stimulative, Medved said, adding that the experience of countries which had a long tradition in this field had been examined, even at today's conference.

Daniel Gerson of the Organisation for Economic Cooperation and Development (OECD) said that performance-based remuneration models should be implemented cautiously and gradually, and unwanted consequences should be monitored.

The conference also heard that the capability of the management to evaluate how well someone performs and how high the reward should be should also be questioned, and that the criteria to be used would also need to be negotiated.

Jakob Počivavšek, one of the top public sector trade unionists, referring to Gerson said that the two main problems were the competences of the management and prudent implementation.

"I claim that we have major issues in Slovenia with this," he said, adding that there were already elements in the pay system related to performance and quality of work that could be applied in Slovenia today.

Počivavšek labelled as misguiding the claim that promotions had so far been exclusively tied to seniority and said that the new system must not be introduced at the expense of the basic pay.

But Medved reiterated for trade unions today that they could not count on an "influx of fresh funds from the budget" for performance bonuses and that the wage bill would not be increased significantly.

The ministry highlighted in a statement in the afternoon that the purpose of proposed changes was not to reduce funding for wages in the public sector, but to increase opportunities for variable rewarding.

15 Jan 2020, 12:36 PM

STA, 15 January 2020 - Slovenia's average net pay for November was EUR 1,235, up by 10% in nominal terms and 9.9% in real terms compared to October and by 4.1% nominally year-on-year. The surge was due to extra payments at the end of year, such as Christmas and performance bonuses, shows the Statistics Office data released on Wednesday.

Meanwhile, the average gross pay rose by 9% nominally to EUR 1,898, up 8.9% in real terms compared to October.

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The average gross extra payment in November amounted to EUR 724, with around 23% of employees receiving the sum, mostly level with 2018.

The November average net salary increased by 2.7% in real terms year-on-year. At a monthly level, the figure grew both in the private sector (+13%) and public sector (+5%), increasing the most in financial and insurance business (+24%).

Moreover, the average net pay for November grew in the electricity, gas and steam sector (+24%), where it was the highest (EUR 1,975), and in manufacturing (+17%).

You can learn more about the images on Slovenia’s euro coins here: Slovenia in your pocket – coins that celebrate the culture

24 Oct 2019, 14:51 PM

STA, 22 October - Parliament backed on Tuesday legislative changes that raise the minimum net hourly rate for student work from EUR 4.13 to EUR 4.56. The opposition Left, which initiated the raise, had been pushing for more, but failed to get support from the coalition and remaining opposition parties, which fear businesses may have trouble handling the new rate.

After the minimum rate for student work, a flexible labour form much sought by employers, was first set only in 2015, the Left made additional regulation one of its conditions for its support to the minority government.

The party put forward its own proposal for changes to the fiscal balance act in July, proposing that the minimum gross rate be raised from EUR 4.89 to EUR 5.90.

The Left later lowered the figure to EUR 5.63, saying this was a compromise reached in negotiations with the coalition, only to see the coalition members of the Finance Committee reduce it further to EUR 5.40 or EUR 4.56 net.

Although voting in favour, coalition MPs also seemed reluctant to back the final figure in today's plenary vote, with Aljaž Kovačič of the senior coalition Marjan Šarec List (LMŠ) for instance arguing the raise - which will take effect on 1 January 2020 - could lead to more undeclared work and actually harm the students.

Soniboj Knežak of the coalition SocDems also argued more focus should be put on inspections "as opposed to measures that could destroy student work" and Mojca Žnidarič of the coalition Modern Centre Party (SMC) criticised the Left for drawing up its proposal without consulting the ministry.

The opposition National Party (SNS) party voted in favour, arguing the raise was only symbolic, New Slovenia (NSi) said it would not oppose the raise while warning the rate needed to calculated so as not to disrupt the market, while the Democrats (SDS) said they could not support it but would also not oppose it.

"For many companies, especially those outside of central Slovenia this means a substantial additional cost. It could happen that this will lead to significant decree in the amount of student work," the SDS's Suzana Lep Šimenko said.

The Left's Miha Kordiš begged to differ, arguing the competitive edge of student work lie not in the hourly rate but in its flexibility. He also called for a comprehensive plan that will make sure "no student's mere survival will depend on them accepting underpaid and indecently precarious labour".

19 Sep 2019, 14:30 PM

STA, 19 September 2019 - Finance delves into Slovenian wages in a commentary on Thursday. It looks for reasons why wages are low compared to the west, before concluding that Slovenians in fact do not really want higher pay and everything it entails.

"For me one of Slovenia's big failures is in how low wages are compared to 'western' Europe. Wages reflect know-how, innovativeness, competitiveness, the value of products and services on the global market," the paper says.

In Slovenia political decisions "have always been geared towards low wages. Geared against profit, getting rich and money. Towards equality at low levels" the commentary argues as it berates past bailouts of old industrial companies and progressive taxes.

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finance.si

The second failure is that Slovenians do not even want higher pay. "They are smug in this comfortable space ... They do not need broader horizons, possibilities, challenges changes."

"This is why money is not an animating force for Slovenians ... This is why I roll my eyes whenever I hear that with higher wages, Slovenians - teachers, doctors, managers - would work better. In Slovenia it is exactly the opposite."

Slovenians are "happy at low revs," which is why money is "something for the weirdos, not a general incentive," the paper says in Why I'm Not Giving You Higher Pay (Zakaj vam ne dam višje plače?).

All our stories on pay in Slovenia can be found here

26 Jul 2019, 17:30 PM

STA, 26 July 2019 - Slovenia's model of temporary posting of workers to other EU countries has been subject to sharp criticism about exportation of cheap labour. The country has seen an exponential growth in such postings over the past ten years and is reportedly third in the EU by the number of posted workers.

 

The Health Insurance Institute (ZZZS), which issues forms to employers posting workers abroad, issued 17,668 such forms in 2008, 103,370 in 2014 and as many as 159,136 in 2017, but the figure fell to 127,059 last year. A worker may be posted abroad several times a year, which means several forms.

The social contributions paid by Slovenian employers for the workers sent abroad do not correspond to the actual pay they earn but to what they would if they did the same work in Slovenia. Posted workers as a rule also get extras such as allowances for separation and higher living costs, so their earnings are higher than if they performed their job in Slovenia.

The strong growth in the number of postings and deductions on social contributions paid by employers has provoked criticism from European interest associations.

The European Federation of Building and Woodworkers (EFBWW) has calculated that Slovenia posts at least 100,000 construction workers to the EU even though it has only 55,000 domestic workers in the industry. Most of them come via Slovenia from the Western Balkans.

This is why the federation submitted a request to the EU Commission at the end of May to investigate the practice and its regulation in Slovenia.

"Slovenia has built a money-spinning business model based on social fraud and worker exploitation. This is totally unacceptable and should be stopped at once," said the EFBWW president Dietmar Schäfers.

The commission has also received complaints from interest groups in Austria, while the country itself has said it will try to engage in dialogue with Slovenia before taking any such step.

Slovenian posting companies have been accused of exporting workforce to the EU at dumping prices as Slovenian labour costs are lower, which makes workers from Slovenia cheaper.

Meanwhile, the Slovenian government has acknowledged that the situation provided food for thought regarding necessary measures.

Slovenia's regulation entails that posting companies need to obtain an A1 document which allows posting temporary workers to other member states and is issued in accordance with the EU legislation by a relevant district unit of the ZZZS.

According to the Labour Ministry, a special task force is examining relevant regulations from 1970, including those governing the social contribution deductions for employers, and drawing up measures to reform them.

Responding to the criticism of the increase in the number of posted workers and worker exploitation, the Labour Ministry told the STA that the transnational provision of services act, which tightened regulations for issuing A1 documents, had been adopted last year.

The law aims to prevent cross-border posting of workers by mailbox companies or employers, particularly in construction and industry, who have already violated regulations, thus tackling worker exploitation, which has been a critical issue.

According to the Labour Inspectorate, there have been 20 violations of the act in 2018.

On the other hand, the ZZZS, which is in charge of revoking issued A1 documents, recorded more than 17,450 irregularities, including over 6,400 tax-related and over 6,300 pertaining to employment contracts.

Foreign authorities have been submitting requests about checking conditions compliance of posting companies or revoking their posting permits to the institute, which has received around 10 such requests by June this year.

According to the ZZZS, the issue is complex and hard to tackle, while Goran Lukič of the Workers' Counselling Office told the STA that the new act somewhat improved the situation even if he is still sceptical about its enforcement.

Meanwhile, Slovenian employers' associations deny the accusations of Slovenia being a kind of gateway for social dumping in Europe.

The Slovenian Employers' Association (ZDS) told the STA that given the amount of labour costs in Slovenia one could not speak about dumping, while the Chamber of Commerce and Industry (GZS) said that it was key that foreign workers who got work permits in Slovenia and ended up working in other EU countries were paying their social contributions and income tax in Slovenia.

15 Jul 2019, 12:59 PM

STA, 15 July 2019 - The average gross salary in Slovenia was at EUR 1,728.12 gross in May and EUR 1,113.88 net. Compared to May 2018, average gross salary was 3.9% higher in nominal terms and 2.5% higher in real terms. Net salary was 3.4% higher in nominal terms and 2% higher in real terms compared to the May of last year, according to the Statistics Office.

The highest net wages were paid out in the financial and insurance sector, EUR 1,556.92 net. Compared to April, average gross and net pay was 0.1% lower in nominal terms and 1% lower in real terms.

In the public sector, net salaries went up by 0.7% on average in May over April, while in the private sector, the average net pay went down by 0.6% compared to April.

More details on these statistics can be found here, while all our stories on pay in Slovenia are here

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

11 Jun 2019, 10:56 AM

STA, 10 June 2019 - The shareholders of NLB bank on Monday confirmed the proposal to pay out EUR 142.6 million in dividends at EUR 7.13 per share, and endorsed all new candidates for the supervisory board.

Mark William Lane Richards, Shrenik Dhirajlal Davda and Gregor Rok Kastelic have been appointed new supervisors and Andreas Klingen was reappointed effective on 11 June.

The management has been authorised to buy NLB up to 36,542 own shares on the organised market over the next 36 months to be used in remuneration packages.

It also received a discharge of liabilities despite a counterproposal by a shareholder who also proposed that the shareholders task the management with making provisions for lawsuits brought by wiped-out junior creditors.

The motion was rejected because it is not within the purview of the shareholders to do that.

Chairman Blaž Brodnjak described 2018 as a very special year since the bank was privatised, which will allow it to conduct business free of limitations imposed by the EU due to state aid commitments once the state has reduced its stake to 25% plus one share.

"When another 10% is sold, it will be able to breathe with full lungs and start competing on a level playing field," he said.

As for business prospects, Brodnjak said the trends were good but indicated the bank was remaining vigilant since the region where it operates is very open and hence susceptible to external shocks.

Since last year's initial public offering, NLB's ownership is dispersed among small domestic shareholders and foreign institutional investors.

The state's stake has been reduced to 35%, but it is expected to be reduced further by the end of the year to 25% plus one share.

One benefit of the state no longer exerting majority control is that the board members are no longer subject to pay restrictions imposed on managers of state-owned companies.

Supervisory board president Primož Karpe said the debate about future remuneration packages has been concluded and pay levels will range from EUR 340,000 to EUR 420,000 gross starting with salaries for June.

This is a significant improvement from current levels: the annual report for 2018 shows that CEO Brodnjak got EUR 192,000 last year, while foreign board members got slightly more, up to EUR 210,000.

"We reached a consensus in the end, bearing in mind that we wanted a stable and motivated board," Karpe said about the new remuneration packages.

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