2013 minimal wages

On January 6, 2013, in Remuneration, by Kalina Jaroslawska

The beginning of 2013 is paralleled with the rise of minimal wages.

In 2013 the minimal wages rose from 1500 to 1600 PLN per month, i.e. by about 7%.

From that the employee will receive about 1181 PLN, i.e. about 80 PLN more than last year.

The employer’s total cost of 2013 minimal wages will rise by about 150 PLN to 1911 PLN per month.

The difference between the employer’s total cost of 2013 minimal wages and the employee’s net amount is more than 700 PLN, which is claimed by the state as obligatory income tax and social security payments. All these deductions amount to more than 60% of the amount the employer needs to expend to finance the minimal wages.

Seems too much, doesn’t it?

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Minimal wages in Poland

On July 30, 2011, in Remuneration, by Kalina Jaroslawska

sxc.hu

Most European countries’ employment legislation provide for statutory minimal wages as a means of protecting employees. Whether or not minimal wages actually play that protective role is a question to economists. Employment lawyers focus on legal aspects of minimal wages, so let me say a few words about that.

Minimal wages in Poland are determined by a special committee comprising members of the government, trade unions and employer organizations.

For 2011 minimal wages are 1386 PLN, which makes roughly 355 EUR. The initial proposal for 2012 is 1500 PLN (~384 EUR based on today’s PLN/EUR exchange rate), but no final decisions have been made yet. Obviously, the trade unions are doing their best for the minimal wages to be as high as possible in the existing economic circumstances.

Minimal wages are determined as a gross amount, which means it must be decreased by statutory deductions (income tax, social and health insurance contributions). In the end, the disposable income is not overwhelming.

The legal effect of minimal wages is that the full-time employee’s general salary (including base salary and regular additional components) may not be lower than minimal wages (for part-time employee minimal wages are computed on a pro rata basis). Otherwise the employee has a claim for increasing the salary. There is one exception: the salary of an employee in the first year of employment may be as low as 80 percent of statutory minimal wages.

Apart from that, minimal wages affect certain other instruments of employment law in Poland. For example, employees filing for damages based on discrimination or victimization claims are guaranteed by statute that the damages, if adjudicated by the court, will not be lower than minimal wages. Certain additional pay components (e.g. for work at night) also depend on statutory minimal wages.

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