2012 minimal wages

On January 21, 2012, in Remuneration, by Kalina Jaroslawska

The beginning of each year traditionally sees a new rate of minimal wages being set.

With respect to 2011, the 2012 minimal wages rose by about 8 per cent – from 1386 PLN to 1500 PLN. Gross 1500 PLN equals to net (i.e. upon deduction of tax and social insurance contributions) 1111 PLN, which is 79 PLN more than in 2011. Looking at it from the employer’s viewpoint, the new minimal wage will cost them an additional amount of 262 PLN, which includes social insurance contributions to financed by the employer from their own resources. As a result, the employer’s total cost of 2012 minimal wages will be 1762 PLN.

The employers’ organizations point out that due to a rise in the minimal wages the companies will be more reluctant to hire new employees, particularly those without qualifications and in less economically developed regions. The employers may also resort to other forms of employment that employment contracts.

Image: creativedoxfoto / FreeDigitalPhotos.net

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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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