The minimum wage in the Czech Republic will rise by CZK 1 100 to CZK 17 300 from January. Of the eight levels of guaranteed wages, which are paid according to the difficulty, expertise and responsibility of the work, only two will be adjusted. The lowest one, which corresponds to the minimum wage, will rise to CZK 17 300. The highest, which is double the minimum wage, will go from CZK 32,400 to CZK 34,600. The regulation was approved by the government on Wednesday. Labour Minister Marian JureÄka (KDU-ÄSL) said this at a press conference after the cabinet meeting. Employers welcome the separation of the guaranteed wages from the minimum wage, while trade unions criticise it.
“We have agreed and decided to raise the minimum wage by CZK 1 100 to CZK 17 300. The year-on-year increase is 6.8 percent,” JureÄka said. According to him, the decision is social, but also responsible. “There were great fears among employers that if we did it like in the past, when the government automatically increased all eight levels of the guaranteed wage, we could cause layoffs,” the minister said. He said if only the lowest and highest guaranteed wages were increased, employers would not come under as much pressure to increase spending on earnings.
After the adjustment, companies’ spending on earnings would increase by CZK 2.1 billion next year, with the state, local governments and health insurance companies spending an extra CZK 80 million. If all guaranteed wages were raised, companies would pay out an extra CZK 3.9-6.4 billion and public budgets would pay out about CZK 97.6 million extra, according to the impact report.
The minimum hourly wage will rise from CZK 96.40 to CZK 103.80. Guaranteed wages will range from the lowest earnings to twice that. The bottom will rise from 16,200 to 17,300 crowns. The upper one will be 34,600 crowns instead of the current 32,400 crowns, i.e. 207.60 crowns per hour instead of 192.80 crowns. The second to seventh level of the guaranteed wage will remain the same as this year.
Employers agree and welcome the separation of the minimum wage from the guaranteed wage. However, they would raise the lowest earnings less. Smaller companies would be in favour of a rise of at most CZK 350 or 500, the industry association at most CZK 900. Trade unions, on the other hand, demanded an increase of CZK 2,000. They also criticise the plan not to raise most guaranteed wages. Moreover, the leaders say the government makes decisions at the last minute and employers and employees do not know ten days before the end of the year how much will be paid from January. Some ministries also had reservations about the proposal. They pointed out that the job description of any grade had not changed, so an increase of only two amounts could be discriminatory. The Ministry of Labour said in the documents for the regulation that the proposal complied with the provisions of the Labour Code. According to it, the lowest guaranteed wage must not be lower than the minimum wage and the highest wage should be at least twice the minimum wage.
The ministry also calculated other variants of the increase for the government, namely by 900, 1,500 or 2,000 crowns. For the increase according to the unions’ demands, companies would have to put CZK 7.1 billion to CZK 11.6 billion more into wages and the public sector would have to put CZK 212.8 million more.
The minimum wage and the eight levels of guaranteed wages this year and next year’s proposal in crowns:
2022 2023
Minimum wage 16.200 – 17.300
1. 16.200 – 17.300
2. 17.900 – 17.900
3. 19.700 – 19.700
4. 21.800 – 21.800
5. 24.100 – 24.100
6. 26.600 – 26.600
7. 29.400 – 29.400
8. 32.400 – 34.600
Source: Proposed Government Regulation and CTK
