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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case SI-2021-1/1781 – measures in Slovenia

Partial reimbursement of the minimum wage increase

Delno vračilo višje minimalne plač

Country Slovenia , applies nationwide
Time period Temporary, 01 January 2021 – 31 December 2021
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Maja Breznik (University of Ljubljana) and Eurofound
Case created 22 February 2021 (updated 20 July 2021)

Background information

The Act Amending the Minimum Wage Act (ZMinP-B), entered into force on 1 January 2021, brought about a new formula for the minimum wage, a 20% increase above the minimum living costs. Consequently, the minimum pay will grow from €940.58 to €1,024.24. In December 2020, employer organisations requested a temporary suspension of the Minimum Wage Act, saying the wage increase will burden the economy. They proposed the inclusion of suspension in the seventh COVID-19 law. As a response, trade unions announced a general strike. The law (ZIUPOPDVE), adopted on 29 December 2020, did not include the suspension and negotiations on the tripartite level continued in January 2021. The result was a compromise solution – a partial reimbursement of the minimum wage increase by the state.

Content of measure

By applying this solution, enacted in the Act on Additional Measures for Mitigation of Consequences COVID-19 (ZDUOP) on 3 February 2021, the government took over the burden to cover a part of the minimum wage increase in 2021. The measure aims at helping businesses to stay afloat.

From January to June 2021, the government will give €50 a month for each worker whose full-time salary without variable pay and bonuses does not exceed the minimum wage. From July to December 2021, employers will benefit from reduced social contributions.

Partial compensation of the minimum wage increase puts some limits on beneficiaries. During the measure and three months afterwards, they cannot dismiss workers (for whom the company receive the state subsidy) or carry out collective dismissals. In 2021, they cannot pay dividends, buy their own shares, pay performance bonuses or awards to managers. If it happens, they must report to the Financial Administration for return or risk high fines.

Use of measure

The Chamber of Commerce and Industry of Slovenia estimates the state will compensate 30% of the minimum wage increase.

Between January and 20 May 2021, the Financial Administration paid €10.8 million for minimum wage subsidies. Each month, about 8,000 employers send a request for subsidies. About 11% of all employees receive state subsidies for the minimum wage increase.

Target groups

Workers Businesses Citizens
Other groups of workers
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
Social partners jointly
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The solution adopted was presented at the Economic and Social Council meeting in which the government’s representatives were authorized to inform social partners but not to negotiate.

Views and reactions

None of the social partners explicitly opposed the solution, but nor was content with it. Although trade unions’ demand was fulfilled and the reason for a general strike removed, trade unions found the direct co-funding of salaries in private sectors ‘odd’. On the other hand, employer organizations were disappointed as they expected €70 a month per worker for the whole of 2021.

Sources

  • 04 February 2021: Act on Additional Measures for Mitigation of Consequences COVID-19 (Zakon o dodatnih ukrepih za omilitev posledic COVID-19, ZDUOP (www.pisrs.si)
  • 04 February 2021: The Chamber of Commerce and Industry of Slovenia, Press Releas (www.gzs.si)

Citation

Eurofound (2021), Partial reimbursement of the minimum wage increase, case SI-2021-1/1781 (measures in Slovenia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.