The Czech Republic will see a significant increase in the minimum wage next year, according to Marian Jurečka, the Minister of Labour and Social Affairs. The minimum wage is to rise by 1600 crowns, setting the new minimum wage at 18,900 Kč. This marks the highest nominal increase in the nation’s history, disregarding the appeals of employers seeking a rise of only a thousand and trade unions who proposed a rise of 2200 crowns.
“The pace of minimum wage growth is faster than inflation. We are also at a certain limit of what companies can handle at this pace so as not to trigger layoffs in certain regions,” said the minister. He says the minimum wage will reach 41 percent of the average salary, which his department predicts to be 46,027 crowns. It currently stands at forty percent.
There will also be a partial increase in so-called guaranteed wage levels. These determine the lowest possible earnings in individual professions, for example, cleaners, salespeople, accountants, and even managers. There are eight of these levels, with the lowest qualification professions usually found in the lowest levels.
The first level is essentially the minimum wage. The second level will increase from 17,900 to 19,500 Kč and the third from 19,700 to 21,300 crowns. The highest level will rise from 34,600 to 37,800 Kč. In the first level of guaranteed wages, there are 43,000 people; in the second, 362,000; and the third, 1,042,000 people.
This proposal still has to be approved by the government. This is likely the last year that the minimum wage will be set in this manner. The Ministry has prepared an amendment to the Labor Code, which is intended to ensure its automatic growth.
Under this amendment, the minimum wage should reach 45 percent of the average salary within a few years. The guaranteed wage levels would then be reduced from eight to four or five. Jurečka stated, “We will be amending the Labor Code during the first half of the year,” indicating that the minimum wage would be determined by the “automaton” from 2025. However, he wants to discuss the proposal further with trade unions and employers.