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Minimum wage goes up

14-06-2018

 

In accordance with the government's proposal, the minimum wage for 2019 may amount to PLN 2220. It is 5.7%, and PLN 120, more than today. From January the minimum hourly rate for those working based on specific civil law contracts is to increase from PLN 13.70 to PLN 14.50. The government presented this proposal to the Social Dialogue Council for negotiation.

 

Along with increasing the minimum wage from PLN 2100 to 2220, the minimum hourly rate for specific civil law contracts would also increase from PLN 13.70 to 14.50. What is important, in relation to the average salary in the national economy projected for 2019, the minimum salary would be at the level of 46.6%.

 

Proposal to be submitted to the SDC

 

The government proposed that the minimum wage should increase by PLN 120 and the minimum hourly rate for specific civil law contracts should be increased by 80 groszy. The government's proposal was presented to the Social Dialogue Council, awaiting negotiations. They should be completed within 30 days. If the minimum wage and the minimum hourly rate are agreed upon, they will be announced by way of the Prime Minister's announcement. Otherwise, the minimum wage and the minimum hourly rate in 2019 will be set by the government in a regulation.

 

The increase in the minimum wage and the state budget

 

According to the estimates of the Ministry of Labour, the increase in minimum wage to the amount of PLN 2220 will translate into an increase in the state budget expenditure in 2019 on account of benefits and contributions financed from the state budget, determined on the basis of the minimum wage by approx. PLN 215 million per year. The data of the Central Statistical Office (GUS) show that the number of employees receiving the minimum wage amounts to approximately 1.5 million people, and at the same time 13% of the total number of employees converted into full-time equivalents.

 

Minimum hourly rate

 

Since 1 January 2017, a minimum hourly rate has been introduced for specific civil law contracts. It is indexed by the growth rate of the minimum wage. In the current year the minimum hourly rate amounts to PLN 13.70 gross. As of January 2019, it is expected to increase to PLN 14.50.

 

The introduction of a minimum hourly rate was dictated by restricting the phenomenon in which a person employed under a civil law contract receives a significantly lower remuneration than the minimum remuneration due to a full-time employee, and also by limiting the abuse of civil law contracts.

 

Labour market regulation

 

Poles have felt a greater stability of employment not only due to the reduction of abuse of civil law contracts and the introduction of a minimum hourly rate, but also due to the liquidation of the so-called "first-day" syndrome.

 

The latter was possible due to the fact that on 1 September 2016 the regulations came into force, according to which a written contract of employment or a written confirmation of the arrangements related to the conclusion of an employment contract must be given to the employee even before they are allowed to work.

 

If the terms of the contract are not confirmed in writing before the employee is admitted to work, the employer shall be liable to a fine. The amendment allows employees to exercise their full rights from the beginning of their employment. Importantly, the State Labour Inspectorate has also gained a more effective tool to efficiently control the legality of employment.

 

Equal seniority for earners

 

An important change, effective from January 2017, also applies to the minimum wage due to seniority. It consists in fact that all employees, regardless of their length of service, are provided with the minimum wage at the same level. Before the change, during the first year of employment, employees could receive at least 80% of the minimum wage, while now – at least the full wage.

 

Change in the component scope of the minimum wage

 

Since the beginning of 2017, the component scope of the minimum wage has changed. It no longer includes night work supplements. The new regulation will ensure that night workers earning a minimum wage, regardless of that wages, receive a night work supplement.

 

Employer obligation

 

The minimum wage is the agreed minimum wage which an employer must pay to each full-time employee on a monthly basis regardless of their qualifications, personal classification, components of remuneration, working time system and distribution applied by the employer, as well as specific characteristics and working conditions.  

 

Paying less than the minimum wage equals to a violation of workers' rights. Together with the increase of the minimum remuneration for work, other benefits are also growing, such as: severance pay on group dismissal, amounting to a maximum of fifteen times the minimum remuneration, supplement for night work, remuneration for downtime or the basis for the assessment of sickness and maternity benefits.

 

up Last update: 18-07-2018
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