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Monday, February 6, 2023

Presidential initiative on the minimum wage

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The introduction of a national minimum wage is a priority for the government, with the President of the Republic taking the initiative to close the consultation with the social partners.

The consultation was in the final stages but was not completed due to the sudden illness of Zeta Emilianidou. In the political commitment of President Anastasiadis for the introduction of the minimum wage (it is part of the government program of his second term) is added an emotional factor as the late Minister of Labor had put her personal stamp on the negotiation.

In the last stage of the consultation for the bottom, its height, the working hours to which it will correspond and its adjustment mechanism will be finalized. The focus is on the amount, but there are other equally important parameters.

The European Directive

The final phase of the consultation will be carried out with an additional table on the table, reaching a political agreement between the European Parliament and the EU Member States on the Adequate Minimum Wages Directive, proposed by the committee in October 2020.

The text of the directive was known to the social partners and therefore the political agreement in Strasbourg does not substantially change the framework of the consultation in Cyprus.

PEO general secretary Sotiroula Charalambous and SEK general secretary Andreas Matsas told “P” that the directive strengthens the arguments in favor of a minimum wage that will ensure that the employee can live with dignity and emphasizes the importance of concluding contracts.

OEB general manager Michalis Antoniou notes that reaching a political agreement on the directive was something that was expected and does not differentiate the ongoing debate. For his part, the Secretary General of the CCCI, Marios Tsiakkis, states that there are points in the dialogue in Cyprus that need to be clarified, such as the salary adjustment mechanism and the definition of the median that will be used to calculate the minimum.

The statements of the employers 'and employees' representatives in “P” show that there is still a long way to go in terms of the goals of the social partners.

“The directive ensures that the employee can live on the minimum wage,” notes Charalambous.

Mr Matsas emphasized that trade union positions were strengthened by a report in the European Commission's recent report on Cyprus's National Reform Program 2022 that a minimum monthly wage of 1,000 was expected to have a significant impact on reducing the risk of poverty (-10 %), especially of worker poverty (-22%), and will mainly benefit young men and women, as well as working women.

The Secretary General of the SEC considers it a given that the determination of the minimum wage will take into account the median salary of the fully employed (according to Mr. Matsas this position was also adopted by Zeta Aimilianidou), which leads to a higher minimum wage compared to between total earnings that includes part-time employees. The basis of the discussion is that the bottom corresponds to 60% of the median. The median in 2020 was 1,573 euros, so a minimum wage could be at 943.80 euros, close to the 1,000 euros suggested by the European Commission services.

The general manager of OEB, Michalis Antoniou, for his part, accepts the political targeting for a minimum of 60% of the median, but cites studies that favor a gradual approach of 60%.

“Social policy can not be done with the minimum wage”, says Mr. Antoniou.

The general secretary of the CCCI, Marios Tsiakkis, is also in favor of the introduction of a minimum lower than 60% of the median, in order to give the companies space to adapt. Regarding the EU's call for a minimum of 1,000 euros, Mr. Tsiakkis states that this is an amount beyond the strength of Cypriot companies. If there is an insistence on such an amount, there will be involvement in the consultation, notes Mr. Tsiakkis.

Experience from the United Kingdom and Germany favors the gradual import model, with the bottom starting at low and gradually increasing.

It is worth noting that the directive on adequate minimum wages does not suggest a specific methodology for calculating them. The Directive requires Member States with statutory minimum wages (including Cyprus) to set clear and consistent criteria for assessing the adequacy of minimum wages.

This procedure includes:

{Bullet} Clear criteria for setting the minimum wage (including purchasing power, taking into account living costs, level, distribution and rate of wage growth, and national productivity).

Tactics and timely updates of minimum wages.

Establishment of advisory bodies, in which the social partners will be able to participate. principles of non-discrimination and proportionality, including the pursuit of a legitimate aim.

Effective involvement of the social partners in setting and updating the legal minimum wage {Bullet}. of gross wages, but does not specify a specific ratio.

The use of indicators commonly used internationally, such as 60% of gross average wage and 50% of gross average wage, can help guide the assessment of the adequacy of the minimum wage in relation to the gross wage level. p>

The purpose of using these indicators is to help Member States assess whether a minimum wage is fair compared to the wages of other workers in the same country, and to inform about the effect of minimum wages on wage inequality.

ES MESOTITLOS} Collective agreements {MESOTITLOS}

With regard to the coverage of employees by a collective agreement, the introduction of measures to encourage collective bargaining is requested. Here the burden falls on the unions, which are called upon to increase their members and through the existing legislation to claim a contract.

The political agreement stipulates that in Member States where less than 80% of the workforce is protected by a collective agreement, they should draw up an action plan to gradually increase this coverage. In Cyprus the coverage rate is estimated at 40-45%, so a coverage increase strategy must be designed. The European Commission considers that the directive will help to protect the wages of vulnerable workers, reduce poverty and wage inequalities at work, and increase incentives to work.

By reducing uncertainty about future labor costs and improving wage-setting frameworks, the directive will contribute to a better business environment and a level playing field for businesses.

Finally, by increasing minimum wage and coverage coverage, the initiative is expected to have a small but positive impact on public budgets due to increased tax revenues and reduced spending on benefits. Labor costs are expected to rise, but businesses, especially small and medium-sized ones, will benefit from the more gradual and predictable minimum wage increases, which will improve the business environment.

Source: politis.com.cy

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