The Final Proposal for the Act on Amendments to the Minimum Wage Act is on the Parliamentary agenda for its second reading today. In response to these legislative changes, the Coalition for a Living Wage has issued an official reaction. The Coalition consists of Novi sindikat, the Independent Union of Croatian Workers, the Regional Industrial Union, the Base for Workers’ Initiative and Democratization (BRID), the Human Rights House, the Pariter Association, the Centre for Peace Studies, and the Center for Education, Counseling, and Research (CESI).
Below, you can read the full letter sent by the Coalition to the members of Parliament, parliamentary clubs, and the Committee on Labor, Retirement System, and Social Partnership. The Coalition emphasizes that the current legal definition of the minimum wage fails to meet the standards of a true living wage, which should ensure a dignified life for all workers.
Proposal for Amendments to the Minimum Wage Act
As the Coalition for a Living Wage, representing a collective of trade unions and civil society organizations, we have submitted an official letter to the Committee on Labor, Retirement System, and Social Partnership, as well as to all parliamentary clubs within the Croatian Parliament. In this letter, we express our deep concern regarding the proposed Act on Amendments to the Minimum Wage Act, which is scheduled for its second reading in Parliament on October 28. Our submission outlines the fundamental reasons for our dissatisfaction with the current proposal and calls for a more ambitious approach to protecting workers’ living standards.
1. The law does not define the minimum wage as a living wage.
“In accordance with Article 56 of the Constitution, every worker is entitled to a living wage that ensures a dignified standard of living for themselves and their families. However, the proposed amendments to the Act fail to define the minimum wage in this manner. Instead, they introduce only cosmetic changes without establishing a clear link between the minimum wage and the actual cost of meeting the basic needs of a worker’s household.”
Decision: The minimum wage should be based on the real cost of living, rather than being tied to abstract percentages of the average salary. This is because average wages in the Republic of Croatia remain far below a living wage, unlike in other EU countries. Therefore, even the Government’s public promise that the minimum wage would reach 60% of the average salary (4,300 HRK net) by the end of its mandate will not come close to making the minimum wage a living wage. Taking economic circumstances into account, the minimum wage regulations should also clearly show the gap between the prescribed amount and actual living costs. This would make the target amount needed to fulfill the minimum wage’s true purpose clear to everyone.
2. The law still continue to leave supplements to the minimum wage (for overtime, work on holidays, difficult work, past work, etc.).
This legal ambiguity enables employers to engage in two types of manipulation: contracting a salary below the legal minimum and forcing employees to perform additional work for only the minimum wage—ignoring the fact that the minimum wage should be the base salary, excluding allowances. Furthermore, employers often reduce the value of these allowances to match the current, inadequate minimum wage, calculating them based on only a portion of the total amount.
To address this, we propose amending Article 2, paragraphs 1 and 4, to more clearly define the minimum wage and its associated allowances. Article 2(1) should be redefined as: “the lowest monthly gross salary contracted, determined, or stipulated and paid to a worker for full-time employment.”
In addition, it is essential to incorporate mandatory minimum percentages for additional work directly into the law. We also call for the adoption of a strategy to improve collective bargaining and expand collective agreements across the Republic of Croatia over the next two years. The government has already committed to increasing collective bargaining coverage, which would allow trade unions to negotiate higher rates for all forms of additional work.
3. The law still contains exceptions that allow employers to pay wages below the legal minimum, a Minimum Wage Act should, by definition, establish a floor that cannot be undermined, rather than providing legal loopholes for sub-minimum pay.
In addition to existing exceptions that allow employers to pay only 95% of the minimum wage, a new provision is being introduced that would allow for sub minimum pay in certain months. The official explanation that this will only be possible if a collective agreement is signed is entirely unsatisfactory. No one, including trade unions, should have the power to negotiate a salary that falls below the legal minimum wage.
Decision: We demand the deletion of Article 8 of the Minimum Wage Act, as well as Article 5, paragraph 3 of the proposed amendments, which introduce these unacceptable new exceptions.
Sincerely,
Members of the Coalition for a Living Wage:
Independent Union of Croatian Workers (Nezavisni sindikat radnika Hrvatske)
Novi sindikat
Regional Industrial Union
Base for Workers’ Initiative and Democratization
Human Rights House Zagreb
Association Pariter
Centre for Peace Studies
Center for Education, Counseling and Research
