Statutory minimal wages
Most European legislations 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.
How is minimal wages determined in PolandMinimal wages in Poland are determined by a special committee comprising members of the government, trade unions and employer organizations. The commitee is referred to as the Council for Social Dialogue. Technically, the Council should, by 15th June of each year, be provided by the government with a set of economic data, including price indices, and forecasts of price/GDP/household income variations. The Council then has 30 days to agree on minimal wages. If it fails to do so, the government may decide on the minimal wages without consulting the Council. Minimal wages for the following year should be determined by 15th September of the current year. In practice the Council rarely reaches an agreement on the minimal wages, so it falls to the government to decide.
Minimal monthly wages and hourly rateIt is important to note that minimal wages to be determined by the Council or the goverment are:
- minimal monthly wages for full time work (understood as work performed under an employment contract) and
- minimal hourly rate for individuals performing professional activities under civil law contracts.
In 2020 the minimal monthly wages is 2600 PLN, while the minimal hourly rate is 17 PLN.
In 2021 the minimal wages will be 2800 PLN, while the minimal hourly rate will be 18,30 PLN.
These are gross amounts, so they must be decreased by statutory deductions (income tax, social and health insurance contributions). In the end, the disposable income is not overwhelming.
Claim for minimal wages
The legal effect of minimal wages is that a full time employee’s monthly salary (including base salary and regular additional payments) may not be lower than minimal wages. Part time employees are entitled to minimal wages on a pro rata basis. Otherwise the employee has a claim to increase the salary up to the statutory minimal wages.
Apart from that, minimal wages affect other areas of employment law in Poland. For example, employees filing for damages based on discrimination or victimisation are guaranteed by statute that the damages, if awarded 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.