ZAGREB, 29 Oct 2021 - Parliament amended the Minimum Wage Act by majority vote on Friday and as of next year employers will have to contract the minimum wage with employees in the gross amount, or face a fine between HRK 60,000 and 100,000.

As of next year, the gross minimum wage will be HRK 4,687. Now it amounts to HRK 4,250.

The government decided yesterday that as of next year the net minimum wage will amount to HRK 3,750, an increase of 10.3%. For the first time, the minimum wage will exceed 50% of the average net wage.

Employers who pay below the minimum wage will also be fined, as will those who sign a contract with an employee in which they renounce the payment of the minimum wage.

Parliament rejected a conclusion by Katarina Peović of the opposition Workers Front under which the government should make sure that the minimum wage was a dignified wage. Anything else , she said, is contrary to the constitution.

Parliament also amended the Voluntary Health Insurance Act and now 120,000 insurees, mainly pensioners, will get free supplementary health insurance.

The amended law raises the income threshold from HRK 1,600 to 2,000 a month and for a single insuree from HRK 2,047 to 2,500. For that purpose HRK 16.8 million has been set aside in this year's budget and HRK 101 million for 2022 and 2023.

MPs also endorsed a corruption prevention strategy for the 2021-30 period.

Amendments to the farmland law was sent into a second reading.

A bill by Anka Mrak Tritaš of the opposition GLAS to cut  the tax on feminine hygiene products did not receive majority support. However, MPs endorsed a conclusion by the ruling HDZ group tasking the government with analysing period poverty within six months and taking action to eliminate it.

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ZAGREB, 29 Oct 2021 - A government representative on Friday rejected all opposition amendments to the Minimum Wage Bill, of which most were put forward by MP Katarina Peović of the Workers' Front, and accepted only an amendment by Croatian Pensioners' Party MP Silvano Hrelja, who is part of the parliamentary majority.

The bill makes it possible for employers to cheat workers, enabling them to sign employment contracts setting the wage below the minimum wage yet pay the worker the minimum wage but make them work additionally for it, said Peović.

It is therefore important that overtime work, work on holidays, work in shifts and work in difficult conditions be paid for separately, she said.

The minimum pay must be defined as a decent pay, she said, noting that this was a constitutional category.

MP Sandra Benčić of the We Can! party said that the bill included "catches" that would enable employers to pay lower wages than the minimum wage of HRK 3,750 (€500), defined by the government.

MP Hrelja, whose amendment was the only one accepted by the government, had proposed erasing an article from the Minimum Wage Bill so that the minimum wage is not lower than the one determined by the bill and the planned working hours do not affect the amount of the minimum wage the worker should receive.

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ZAGREB, 28 Oct 2021 - Opposition MPs said on Thursday, ahead of a debate on changes to the Minimum Wage Act, that nobody was against the minimum wage being raised but not in such a way to make employers cover the cost. 

Marin Lerotić of the Istrian Democratic Party (IDS) said his party was against employers covering the cost of a higher minimum wage, wondering when the serious discussion would begin about tax reliefs and stimulation of industries, notably export-oriented ones.

Davor Bernardić of the Social Democrats said PM Andrej Plenković's announcement of a HRK 350 increase in the minimum wage was a show, adding that people live poorly and noting that 200,000 people have left the Slavonia region.

Peđa Grbin of the Social Democratic Party (SDP) said that realistically, nobody could be against the PM's announcement but that the entire wage policy should be discussed.

Generally, wages are low, and when inflation is added to that, it is clear that not even the average wage suffices for a normal living, let alone the minimum wage, Grbin said.

Marija Selak Raspudić (Bridge) said the prime minister was "feeling generous" yet wanted somebody else to pay the bill. That is what the minimum wage bill is about, she said.

"If the prime minister really wants to be generous... he should raise the non-taxable income to HRK 5,000, as suggested by entrepreneurs," she said.

Katarina Peović of the Workers' Front said that the bill, under which the minimum wage would have to be agreed in its gross amount and employers who fail to do so would be penalized, would not bring anything good to 52,000 workers receiving the minimum wage.

The bill is unconstitutional and the amendments will only serve to improve the statistics, she said.

Hrvoje Zekanović of the Croatian Sovereignists said that employers were avoiding the government's measures, citing the example of a woman from Šibenik whose minimum wage did not increase at all after it was raised for the last two times. However, on paper her working hours were first reduced from eight to six and then to four, he said.

Employers are avoiding compliance with the government's measures by registering their workers as working six or four hours a day, so we are doing those workers a disservice instead of helping them, Zekanović said, calling the government's measures as 'cosmetic ones'.

Majda Burić of the ruling HDZ party said that the institute of minimum wage was a very sensitive one and had to be approached seriously, which, she said, the government was doing.

The gross minimum wage amounts to HRK 4,250, and the net amount is HRK 3,400, she said, adding that as of January 2022 the net amount would rise by HRK 350. Annually, that is an increase of 10.3%, the highest so far, she said.

She recalled that during the Andrej Plenković governments' terms in the past five years, the minimum wage had been raised by a gross amount of HRK 1,567 and a net amount of HRK 1,254.

During the term of the SDP-led government, it was raised by HRK 179, she said.

(€1 = HRK 7.521247)

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To residents of the country, the news will hardly come as much surprise: Croatia's minimum wage is among the lowest within all of the countries of the European Union.

Though 2021 has only just begun, Eurostat looked at minimum wage levels in the entire block for the month of January. Croatia's minimum wage is the 5th lowest in Europe. Only in Bulgaria, Hungary, Romania and Latvia are the set level lower than Croatia's minimum wage.

In January, the lowest minimum wage, of €332 per month, was reported in Bulgaria. In Hungary, Romania and Latvia, it was between €440 and €500 per month. Croatia's minimum wage followed at €563 per month. The Czech Republic and Estonia also had a minimum wage of below €600.

Some countries within the European Union do not have a minimum wage at all, although they are rarely regarded as being among the countries with the block's lowest living standards. They are; Denmark, Italy, Cyprus, Austria, Finland and Sweden.

21 EU member states do have a national minimum wage. It ranges from €700 in the east of the union to €1,500 in the northwest. In 10 member states - mostly in Eastern Europe - the minimum wage in January was below €700 per month. In five countries in southern Europe, the minimum wage was between €700 and slightly over €1,100. In six countries in the west and north, it was above €1,500.

The data shows that the highest minimum wage in the EU is as much as 6.6 times higher than the lowest.

One element of the statistics which may come as a surprise to the country's residents is that the countries regarded by the EU as being 'southern Europe', all had a higher minimum wage than Croatia's minimum wage. In Greece, the lowest minimum wage in January was €758. Among southern European countries, it was followed by Portugal, Malta, Slovenia and Spain who each had a minimum wage of between €780 and slightly over €1,100. Some of south Europe's countries – specifically Greece, Portugal and Spain – were among the continent's hardest hit in the 2008 financial crisis and aftermath. That they should have recovered to the point where their minimum wage is higher than Croatia's minimum wage is notable.

The Croatian diaspora around the world. Economics is not the only cause of Croatians leaving their homeland - they also move for political and sociological reasons © Davejcroyd

Among the countries in the north and west of the continent, France had the lowest minimum wage, of €1,555, followed by Germany, Belgium, the Netherlands and Ireland, where the minimum wage ranged from slightly over €1,600 to slightly over €1,724. Luxembourg had the highest minimum wage, of €2,202.

When the minimum wage is expressed in purchasing power standards (PPS), the gap between member states is somewhat narrower - the minimum wage is 'only' 2.7 higher than the lowest. Bulgaria is still at the bottom of the list with a minimum wage of 623 PPS per month, while Luxembourg tops the list with 1,668 PPS. Croatia's minimum wage in January 2021 was 805 PPS.

While figures on Croatia's minimum wage level within the European Union are not entirely welcome on a national level, this economic disparity is, in some way, how the European Union is set up to function – residents of EU member states may travel to and live within any EU member state where opportunities may be better and wages may be higher. Croatians have free access to the employment market within the whole of the European Union.

Where Croats most live in Germany. Croatians are the sixth-highest group of residents of Germany who hold citizenship in a different country © Michael Sander

Many young Croatians are happy to take advantage of this situation and travel overseas for their employment. While this is beneficial to them on an individual level, it contributes to a considerable 'brain drain' from Croatia – where the brightest and best young minds are snapped up for employment in other countries, where wages are higher. It also greatly impacts the demographics of Croatia's population.

In the 1960s, Croatia had five or more employees per retiree, supporting the country's economy while the elderly enjoyed the retirement they had long worked for. In the Croatia of today, only 1.4 employees remain in the country to help support a nation that, thanks to advances in healthcare and education, has an increasing number of old people and retirees. And, why should younger people be asked to stay, when Croatia's minimum wage lines up so poorly compared to countries which are just a few hours away by bus?

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.

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ZAGREB, October 10, 2018 - The NHS trade union federation welcome the announced revocation of the measure whereby employers who have paid minimum wages to employees have been freed of the obligation to pay 50% of contributions, and the unions find that measure to have been just an encouragement to employers to give minimum wages to more and more workers.

Some good news for personal finances!

Many workers in EU countries, including Croatia, struggle to make a living with minimum wages which are far below the official low-wage threshold.

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