The Czech government has unveiled a strategic proposal aimed at gradually elevating the minimum wage while aligning it with average income levels.
This initiative seeks to bridge the gap between minimum and average wages, targeting a minimum wage equivalent to 47 percent of the average wage by 2029. However, amidst its objectives, the proposal includes the contentious measure of abolishing guaranteed wages, triggering dissent from opposition factions and trade unions.
Employers and trade unions are in favor of the government’s endeavor to hike the minimum wage, albeit with discrepancies regarding the magnitude of the increase. Recent deliberations have seen contrasting stances, with employers advocating for a 45 percent raise and unions pressing for a 50 percent increment. Eventually, the government settled on a compromise of 47 percent.
The plan entails a phased escalation of the minimum wage, commencing at 41 percent this year and progressing to 47 percent by 2029. This trajectory would translate to a nominal uptick from CZK 18,900 (gross) monthly to CZK 20,500 next year, with the government projecting an average salary of CZK 48,512 for the ensuing year.
The proposed increase has drawn criticism from the opposition, advocating for a more substantial rise. Some coalition members also express reservations, insisting on a higher percentage. Nonetheless, coalition politicians defend their proposal, asserting it as the most significant and rapid minimum wage growth in three decades, poised to catalyze overall wage progression in the national economy.Alongside the minimum wage hike, the government’s labor code amendment proposes the elimination of guaranteed wages, which delineate minimum earnings for specific professions in the private sector across eight categories of work. This move towards a singular minimum wage figure is met with both acclaim from certain business quarters and threats of protests from trade unions opposing the abandonment of guaranteed wages.
The coalition endeavors to expedite the amendment’s passage, targeting implementation by July 1 of this year. Prior to enactment, approval from both the Chamber of Deputies and the Senate is imperative, followed by the endorsement of President Petr Pavel.
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