In January 2020, the minimum wage in Slovenia increased. On January 1, 2021, another novelty awaits business owners. A new formula for calculating the minimum wage, based on the calculated minimum cost of living, will enter into force.
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Raising the minimum wage
What will the new formula change? On 1 January 2020, the Minimum Wage Act increased the minimum wage from 667 EUR net to 700 net EUR. All allowances (for length of service, work and business performance and for more difficult working conditions) were also exempted from the minimum wage.
An amendment to the Minimum Wage Act was adopted at the end of 2019 without the consent of the social partners. Employers argue that the changes are reckless as they will deal a severe blow to individual companies and industries. The unions, on the other hand, argue that these innovations will bring positive economic and social effects.
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In 2021 we expect a new formula for calculating the minimum wage
On January 1, 2021, a novelty awaits us again. The amendment also stipulates that a new formula for calculating the minimum wage will enter into force at that time. The minimum full-time salary will have to exceed the calculated minimum cost of living by 20%. On the other hand, they also enforced the upper limit of the minimum wage – it cannot exceed minimum living cost by more than 40%.
New formula to calculate living costs
One of the bases for calculating the minimum cost of living is also the food basket. The Statistical Office reports that food prices have risen again on a monthly basis. The annual deflation, to which cheaper petroleum products contributed the most, was largely reduced by the higher price of food – which is as much as 3.8 percent higher. If we really decided to pre-calculate the minimum cost of living, this would again change the amount on the basis of which the minimum wage would be calculated in 2021 according to the new formula.
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