ZAGREB, August 27, 2019 - The Trade Union of State and Local Government Employees of Croatia said on Tuesday that raising the base pay would not equate salaries between public and government employees, and that the only solution was for the government and social partners to agree on a long term and consistent pay policy.

The announced 2% base pay rise as of September 1 will keep the status quo at the level above 2%, while pay rises by sector and activity will only deepen the existing pay differences between public and government employees, the union said.

Employees in comparable categories in state administration, public services and local government will continue to have different salaries, the union said.

Salaries in comparable categories should be equated as much as possible so that some rise slower while others increase faster, which is only possible in conditions of economic growth, the union added.

More news about public sector in Croatia can be found in the Business section.

ZAGREB, August 26, 2019 - Mass-scale emigration of Croatians abroad has triggered off two significant processes on the labour market: a salaries rise and the opening of the market to older workers, the Večernji List daily newspaper wrote in its issue on Monday.

The beginning of the rise in monthly salaries coincided with the end of the recession and the start of the economic recovery in 2014, Croatian Chamber of Commerce (HGK) analyst Zvonimir Savić was quoted by the daily newspaper as saying.

The average monthly take-home pay is around 6,500 kuna (878 euro), with the average monthly wage in Zagreb being 1,000 kuna higher than that.

The daily shows in a table that expressed in euro, the gross monthly salary in Croatia stood at 1,030 euro in 2016 to rise 10.6% to 1,139 euro in 2018.

Analyst Savić warns that a rise in salaries in Croatia in the recent years was lower than that in some countries in transition.

When it comes to the gross salary, Slovenia, Estonia and the Czech Republic have average gross salaries than those in Croatia. Of the 16 countries presented in the table, the first mentioned three countries occupy the top three places, Croatia ranks fourth (€1,139), and is followed with Poland with the gross monthly salary of €1,070 in 2018 and by Hungary (€1,035). Slovakia and Latvia are in the group with the gross monthly salary above 1000 euros (1,013 and 1,010 respectively) last year.

In Slovenia, for example, the gross salaries rose by 6.2% from €1,585 in 2016 to €1,682 in 2018.

A majority of countries in transition have been faced with the brain drain and Romania, for instance, addressed that with a significant increase in salaries. For example, gross salaries in Romania skyrocketed by 54% from 2016 to 2018 to come to €964.

Broken down by sectors, in Croatia one of the biggest rises of some 5 percent was registered in the healthcare sector. Thus, currently the average net salary paid to employees in this sector is 8,413 kuna (€1,137).

In Croatia, every other employee receives the monthly salary below 5,595 kuna (€756) and every fourth worker earns less than 4,252 kuna (€574) monthly.

More economic news can be found in the Business section.

ZAGREB, August 20, 2019 - The average take-home pay in Zagreb this past May was 7,546 kuna whereas the average take-home pay in Croatia for that month amounted to 6,476 kuna, which means that the average monthly salary in the capital city was higher by 1,070 kuna (approximately 145 euros).

The take-home salary in May in the capital city rose by 74 kuna on the month and by 217 kuna on the year.

Compared to April, that was a nominal increase of 0.99% and 2.96% on the year, according to data provided by the city administration's statistical department

Zagreb's highest average monthly salary in May was earned in the crude oil and natural gas excavation services, 22,170 kuna, whereas the lowest average wage of 4,251 kuna was paid in metal manufacturing industry, 4,182 kuna.

More economic news can be found in the Business section.

ZAGREB, March 4 (Hina) - We need a Croatia to suit its people, President Kolinda Grabar-Kitarović said on Monday at a conference "The Croatia We Need – Two Years On" organised by the Večernji List daily. Emphasising earnings, the president said that the aim should be for the average salary in Croatia to be 7,500 kuna.

Addressing the conference, the President assessed that Croatia was faring well on the international scene, however, not as well as we would like it to be when it comes to the development in the country, underscoring that Croatian citizens have to feel the improvement in their bank accounts. "They have to feel that they have a greater purchasing power, better standard but also a greater optimism and hope for better trends in a positive direction in Croatia," the President said.

She recalled that two years ago she warned of the problem of depopulation and that a lot of people interpreted that she was dramatising when she said that Croatia was in a "state of emergency," in that regard. "But the situation is indeed dramatic, because demography is the issue of all issues," she said, adding that citizens' mobility is a good thing but it's important for Croatia to create conditions for the return of people.

The current situation is better, she said and the results are being felt with regard to demography with a mild growth in the birth rate as a reflection of a slight improvement in optimism in one's one state.

"The simple fact that we are discussing this existential problem, and it is in focus of public debate and that we are moving away from ideological issues and discussing issues that concern our people - whether they will have a job, whether they will be paid and whether that will be enough to survive, whether they will be able to raise children and get a housing loan that they can afford - I believe that people are beginning to believe more in the state and that proves that the government and society are thinking seriously," she added.

It is necessary to stop the continuation of the negative population trend, she believes with tax policies in favour of investments and increased earnings.

Emphasising earnings, the president said that the aim should be for the average pay in Croatia to be 7,500 kuna. "That is the minimum that I came to through talks with people throughout Croatia when I asked them under what conditions would they remain in Croatia. That will raise the standard of the middle class in society on which the state's stability rests," she said.

It is essential, she considers, to limit fixed-term working contracts because last year as many as 25.3% of beneficiaries of the Croatian Pension Institute had fixed-term contracts which is among the highest rates in the EU.

"We need to explain what that means and how that negatively impacts existential security and mostly among young people at that, which is why many of them cannot plan their future," she warned.

Prime Minister Andrej Plenković on Monday said that the government cannot set the minimum wage at 7,500 kuna by decree as that would mean the close of business for many companies and a loss of many jobs, adding that the situation in the country today was a "tiny bit better" than two years ago.

The prime minister said he did not consider the president's speech as criticism, noting that for the most part it commended the government. He added, however, that it was not possible to set the minimum wage at 1,000 euro by decree. "What happens then? Then all those employers who would have to pay that all at once would stop doing business or start firing," he added.

He stressed that his government was working. "GDP is growing, the debt is being reduced. We had a surplus, economic growth is founded on healthy foundations, both the average and the minimum wage are increasing, unemployment has fallen, employment is growing, absorption of European funds is increasing, strategic projects are underway and all that in the past two years in fact... and I wouldn't say that the situation is worse but rather a tiny bit better," he said.

More news about salaries in Croatia can be found in the Business section.

Valamar Riviera has signed an agreement with the Trade Union of Tourism and Services of Croatia and the Trade Union of Istria, Kvarner and Dalmatia, providing Valamar employees with new benefits, including the 13th salary in the net amount of 5,000 kuna. Valamar will pay the 13th salary to all permanent employees and all workers who will work for the company for at least ten months in 2019. The 13th salary will be paid by December 2019, reports Večernji List on February 20, 2019.

Valamar has also granted its employees a minimum net salary of 5,000 kuna for all employees who perform the full monthly numbers of hours. As for seasonal workers, Valamar will pay a special bonus for the season between 1,200 and 2,000 kuna net, depending on the number of months worked, out of which 500 kuna net will be paid to all employees with the pay for the month of July. In addition to the guarantee of a minimum net salary of 5,000 kuna for all employees, the 13th salary and special bonuses during the season, Valamar will pay a Christmas bonus in the net amount of 2,000 kuna to all permanent employees in 2019.

Due to the benefits offered to its employees, Valamar is the only tourism company that has entered the list of Top 20 employers in Croatia and was rated as the best employer in tourism. Each year, Valamar creates between 300 and 500 full-time positions and offers excellent opportunities for career development, with a developed system of internal and external training.

The improved benefits for Valamar employees have been welcomed by social partners led by the Trade Union of Tourism and Services of Croatia and the Trade Union of Istria, Kvarner and Dalmatia. Eduard Andrić, the president of the Trade Union of Tourism, said: “Valamar continues to increase the wages from year to year, through the negotiations with the trade unions which is the only way to prevent the labour force from moving abroad, which has so far created a considerable shortage of workers in the tourism and hospitality industry.”

Marina Cvitić, the president of Trade Union of Istria, Kvarner and Dalmatia, emphasised: “Valamar is one of the first tourism companies to recognise the problem of the lack of tourist workers and accordingly take action to ensure a sufficient number of seasonal workers, as well as to keep the full-time workers. Over the last three years, the salaries have risen by over 20% on average. The agreed payment of the total non-taxable amount of 7,500 kuna a year to most permanent employees and those who will work longer than ten months will mean an increase in annual income of up to 10%, so we do not doubt that these workers will be satisfied. This is how responsible employers behave towards workers who are the key to their success. I must also point out that the employer fosters social dialogue, while the continuous improvement of the position of both permanent and seasonal workers is a result of constructive dialogue and respect for the views of social partners. "

Translated from Večernji List.

More news about Croatian tourism can be found in the Travel section.

ZAGREB, January 26, 2019 - The average monthly net pay in legal entities in Croatia in November was 6,267 kuna (approx. 847 euro), rising 1.2% in nominal terms on the year, but dropping by 0.1% in real terms, show the latest figures published by the national statistical office (DZS).

The Croatian Chamber of Commerce notes that this was the first time since the beginning of 2016 that an average monthly salary declined in real terms.

Although the monthly salary in November rose year on year in nominal terms, when the yearly inflation rate of 1.3% is applied, it fell by 0.1% in real terms, the HGK said in its explanation.

These trends were affected by a drop of salaries in some enterprise branches, notably in the shipbuilding sector.

The take-home pay of 6,267 kuna in November compared to October was higher by 0.1% in real terms and lower by 0.2% in nominal terms.

The median monthly income amounted to 6,100 kuna (approximately 824 euro), which means that a half of employees in Croatia earned less than that amount and the other half earned above that amount.

The average hourly pay in November was 35.98 kuna (4.8 euro) in the net amount, rising by 4.1% from October.

More news on salaries in Croatia can be found in the Business section.

ZAGREB, November 30, 2018 - At the government session on Friday, Prime Minister Andrej Plenković announced an increase in the net minimum wage from 2,752 kuna to 3,000 kuna, an increase of 248 kuna or 9% compared to 2018, underscoring that this is the largest one-off increase in the minimum wage since 2008.

"We will endorse a decision that will increase the minimum wage which currently amounts to 2,752 kuna net, to 3,000 kuna net. This is an increase of 248 kuna or nine percent compared to 2018. The gross amount that today totals 3,440 kuna will be 3,750 kuna, an increase of 310 kuna," Plenković said.

This is the highest one-off increase of the minimum wage since 2008, the prime minister underscored.

Expressed in the euro, following the increase the minimum wage will amount to 404 euro net or 505 gross.

Compared to other countries in central and eastern Europe, Plenković noted that according to Eurostat figures from July, Croatia's minimum gross wage amounted to 464 euro and was even then higher than in Bulgaria (261 euro), Lithuania (400 euro), Romania (407 euro), Latvia (430 euro) and Hungary (445 euro).

After this increase, the minimum wage in Croatia will as of the New Year be higher than in the Czech Republic (469 euro), Slovakia and Poland (480 euro) and Estonia (500 euro).

Plenković noted that according to the Labour and Pension System Ministry's data, about 37,000 people are currently earning a minimum wage.

He recalled that in the first two years of this government's term, the minimum wage was increased twice by five percent, which cumulatively amounts to 10.25%, with an additional 3.3% increase after excluding overtime, Sunday and public holiday hours.

"Prior to that, it was increased during our term by 13.6% compared to 2016. That was the biggest increase until now and with this increase that will mean a total net increase of the net minimum wage during our term of 504 kuna and that is 23.9%," the prime minister underscored.

He noted that the share of the gross minimum wage in the average wage will increase significantly in 2019 to 44.85%.

Plenković underscored that this measure takes employers into account. Certain compensatory measures are foreseen because the government doesn't want the challenge of increasing labour costs to lead to negative consequences for workers or their employers.

"The minimum wage is usually paid in the textile, timber, leather and metal industries and as such in 2019 we will retain the reduced base wage to calculate contributions by 50% for those workers who were paid a minimum wage in 2018, and in 2020, those reliefs will be reduced by one half," he underscored.

In addition to fiscal breaks, the government has prepared a set of measures to preserve jobs and that means that next year we will enable the use of up to 1.5 million kuna in support and in 2020 that support will be even greater in an effort to save jobs and open new ones.

Plenković recalled that the 2.8% increase in Gross Domestic Product (GDP) meant that it had grown for the 17th consecutive quarter and that the growth was based on sound foundations, on growing exports and investments.

"We think that the GDP growth, which has continued for 17 quarters in a row is a good signal. Figures that relate to the export of goods and services are also good – with exports increasing by 5.2% and services by 2.5% while investments have grown for the 15th consecutive quarter," he said.

With regard to industrial production falling after a long period, Plenković said that the government has been thinking about consolidating production and exports.

For more on the minimum wage in Croatia, click here.

ZAGREB, November 27, 2018 - Nearly three quarters of Croatian employers will pay higher Christmas bonuses to their employees based on new rules on non-taxable receipts which are due to come into force on December 1, the Croatian Employers' Association (HUP) said on its website on Tuesday.

Last week, the HUP gathered information from 200 companies regarding the increase in non-taxable receipts for bonuses, showing that 74 percent of employers would increase the bonus amount for this year.

Given that some of the companies had defined their financial plans for the current year last year, 26 percent of employers said they would not be able to pay higher bonuses than planned.

Such moves by the government are welcomed by the business community. Although this measure will not help reduce costs to any larger extent, most employers are ready to take this opportunity to reward their employees. That's why we want to encourage and support the government in all proposals that will lead to further alleviation of the burden on businesses, HUP director-general Davor Majetić said.

The proposed amendments to income tax rules, under which the maximum annual amount of non-taxable receipts for workers would be increased from 2,500 to 7,500 kuna (from 340 to 1,000 euro), have been under public consultation until today, and the amended rules are to take effect on December 1.

Finance Minister Zdravko Marić said that the amendments gave employers the opportunity to reward their employees with a Christmas bonus or a 13th wage.

For more on Croatian business news, click here.

ZAGREB, November 24, 2018 - The Croatian Centre for Workers' Solidarity and the New Trade Union, speaking in Zagreb's Cvjetni Trg square on Saturday, drew attention to poor work conditions in the garment industry as part of the "Turn Around, H&M!" campaign organised by the global network Clean Clothes Campaign (CCC).

New Trade Union leader Mario Iveković said that textile production jobs were the worst paid jobs in the world. "This industry, apart from being the least paid, is also one generating high profits at the expense of workers," he added.

Iveković said that Croatia was a poor promoter of decent pay that would be enough to support a family of four. "The Constitution guarantees decent pay for workers so that they can support their families, and we are still talking about the minimum wage. In my opinion, this is the biggest failure of union activity because we are not even asking for honouring the Constitution," he said.

The campaign organisers were gathering signatures to petition for more decent wages and for improving work conditions in the H&M chain. They called on citizens to sign the petition, claiming that over 130,000 signatures had already been gathered worldwide.

Clean Clothes Campaign is an international network of non-governmental organisations and trade unions fighting for workers' rights in the garment industry. In May this year it launched the "Turn Around, H&M!" campaign against the Swedish-based global garment retailer for failing to deliver on the promise it had made five years ago that it would improve work conditions and ensure decent pay.

"At risk are 850,000 workers who produce 60 percent of H&M products. In their plants in Bulgaria, Turkey, India, Cambodia and elsewhere, workers are afraid of organising themselves in unions and management sometimes work on curbing union activity. All this leads to workers' exploitation," said Ana Vragolović of the Croatian Centre for Workers' Solidarity.

During the global week of action, Clean Clothes Campaign activists in Germany, the Netherlands, Italy, India, Cambodia and other countries will organise different campaigns and present their demands to H&M concerning overtime and minimum wages.

For more on Croatia’s labour relations, click here.

ZAGREB, November 22, 2018 - After meeting on Thursday, Labour and Pension System Minister Marko Pavić and public sector union representatives said that the conciliation process would continue on Monday. "We agreed that this was the first round of conciliation. We absolutely conducted it in good faith, with a good exchange of arguments. We agreed that we would not release any details until the final meeting on Monday, when we will meet and see whether we can resolve this dispute," Pavić told reporters. Several days ago, the unions said they would organise a public sector strike.

Pavić added that it was obvious that both the unions and the government were interested in ending the process.

We didn't complete the conciliation, hence we cannot release any details, the president of the secondary school unions, Branimir Mihalinec, said. "The government proposed that we should continue with the conciliation on Monday, when it will have a final answer. We accepted that and consider it to be reasonable and we will try and see if we can find a final solution to the dispute on Monday," said Mihalinec.

He added that union activity would continue as planned and that only a good proposal by the government would make the unions cancel the planned protest.

Neither Pavić nor the unionists wanted to say whether any new offer had been put on the table.

Public sector unions are seeking a 5.8% increase in the base pay in 2019, yet the government is offering an increase of 3%, claiming that that's the maximum it can provide considering the budget.

The unions have rejected that offer and announced a public sector strike, which is scheduled to start on November 28 and will be held one day every week until their demands are met.

For more on trade unions in Croatia, click here.