The proposed amount, which the Government will decide on by the end of October, is lower than the minimum proposal of the EU directive

The minimum wage in Croatia could rise next year to around 4,000 kuna net, or 5,000 kuna gross, from the current 3,750 kuna net, but the amount of the minimum wage will only be discussed by the expert committee of the Ministry of Labour, and then, as usual, the Government will by the end of October adopt the Regulation governing the minimum wage.

This week, the European Parliament adopted a directive on the minimum wage at the level of the European Union, and member states, after the Council adopts the document, must align minimum wages within two years. Although the directive does not specify the lowest amount of the minimum wage, but rather what should be taken into account regarding it, trade union guidelines have been incorporated into the document and according to them the gross minimum wage should be at the level of 50 percent of the average gross wage, or 60 percent of the median.

If this is translated into the Croatian framework, then the gross minimum wage in Croatia should be at the level of 5,246 kuna, given that the average gross wage in Croatia was 10,492 kuna, and the median was 8,562 kuna. If indeed from 1 January next year the minimum wage is 5,000 kuna gross, or 663.61 euros, this would bring us closer to the EU guidelines, but we would still be below the threshold.

High inflation

And if you ask the trade unions, even that is insufficient. Their proposal, says Krešimir Sever, will be that the minimum wage should be above 700 euros.

– The directive emphasizes that the minimum wage should be sufficient to ensure a decent life and decent working conditions. A wage of 4,000 kuna net certainly would not be that, nor would it be if it were 5,000 kuna, if we take into account inflation this year and, expectedly, next year, or wage growth this year, due to which the share of the minimum wage in the average wage has drastically fallen – Sever warns.

He adds that the fact should be taken into account that 26 percent of total household costs are food costs, which have increased the most in inflation, and that for those who have the minimum wage that share rises to 40-50 percent.

– Employers and those who make decisions should take that into account – Sever says.

It remains to be seen what employers will say about the amount of the minimum wage. The Croatian Employers' Association (HUP) traditionally objects to the very fact that the minimum wage is defined by law, that it is not a matter of negotiation between worker and employer, but it seems that the amount is no longer disputed by anyone, since there is a huge shortage of labor on the market and workers are being sought for wages much higher than the minimum. HUP told us that they would comment on this later. For industries in which employers cannot pay higher wages, such as the textile industry, there is still the possibility that it be regulated by a collective agreement, and in that case it must not be less than 90 percent of the prescribed minimum wage, in this case 3,375 kuna net.

The Ministry of Labour says that the amount of the minimum wage has yet to be determined. The procedure is such that the Expert Committee for Monitoring and Analysis of the Minimum Wage, which includes representatives of trade unions, employers, the scientific community and the Government, proposes a new amount of the gross minimum wage for 2023 within a certain range. The Ministry is expected to have a recommendation at the beginning of next week.

Clear procedure

Before drafting the new Regulation on the amount of the minimum wage for 2023, a consultative meeting is held with the social partners, at which the positions of the social partners are discussed in principle without presenting specific amounts. After that, the Government adopts the Regulation at a session by the end of October 2022, and, according to the law, the minimum wage cannot be determined in an amount lower than the amount that was determined for the previous year.

The Ministry of Labour notes that during the term of this Government the minimum wage has been increased in total by 1,567.50 kuna gross or 1,254 kuna net, that is, by 50.24 percent, while during the term of the previous Government it was increased by 0.4 percent. The share of the minimum wage from the initial 38 percent, which it amounted to in 2016, reached 49.21 percent of the average gross wage from January to July 2021.

Overtime is paid separately and is not part of the wage

The latest amendments to the Minimum Wage Act made it possible to exclude from the amount of the minimum wage wage increases on the basis of difficult working conditions, overtime and night work, as well as work on Sundays and holidays.

From 1 December 2021, the minimum wage is also considered to be the wage according to the complexity of jobs from the extended collective agreement, and from 1 June 2022 the collective agreement for hospitality has also been extended in application (minimum wages from 4,687.50 kuna to 6,400 kuna).

The extension of the collective agreement for construction is underway.

Source: Jutarnji.hr