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Jan Prošek | April 9, 2024

Valorisation of the minimum wage

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The government has approved a draft amendment to the Labour Code, which it plans to submit to Parliament. The draft amendment contains a change in the method of determining the minimum wage, which is be newly to be valorised based on a coefficient set by the Government. Another intention is to abolish the current form of the guaranteed wage, which will now apply only to employees in public services and administration. Employees in the private sector are to be protected by the minimum wage and by extending or strengthening collective bargaining arrangements, on wages among other things. However, this does not address the additional protection of the employees of employers, where there are no trade unions. According to the government, the intention to abolish the guaranteed wage was due to its excessive complexity in its current form.

What does the government expect from this proposal? The primary concern is the predictability and transparency of minimum wage increases. The government is also aiming for a gradual and long-term increase in the minimum wage to the average wage in order to improve the living standards of the lowest income earners.

Discussions about such a change in the valorisation of basic wages have been going on for some time. At present, we can only wait to see if and in what form this proposal will pass through the legislative process in Parliament.