STA, 16 May 2022 - The incoming coalition intends to implement a pension reform, raise the minimum pension and the minimum wage, respect social dialogue, eliminate precariousness, introduce an integration system for foreigners, while providing affordable housing and regulating energy and food prices if necessary.

The Freedom Movement, Social Democrats (SD) and Left pledge in their coalition agreement to raise pensions to at least EUR 700 in 2023 and to examine the option of universal basic income for lower-income pensioners.

Workers will be allowed a gradual transition to retirement and the option of pensioners starting working again will be examined by taking into account the needs of pensioners, the labour market and the public interest.

The coalition partners commit to implement a financially sustainable pension reform by strengthening the first pillar (mandatory contributions from the wages) and encouraging people to additionally save for pension.

The lowest pension will be by 10% above the poverty threshold, while new sources of pension funding will be secured to reduce dependency on contributions from wages.

Apart from raising the minimum pension, the new coalition also intends to raise the minimum wage to at least EUR 800 net as of 2023 and pursue its growth in real terms.

The partners pledge to implement the minimum wage as the lowest possible base pay in a transitional period to eliminate cases where workers receive less than the minimum wage while the difference must be paid from the budget.

The coalition will return to social dialogue on the Social and Economic Council (ESS), which has come to a standstill under the outgoing government.

In agreement with the social partners, the work week will gradually be reduced to 30 hours while the full pay for the existing 40-hour week will be preserved.

Precariousness is planned to be eliminated by drafting a strategy with a specific timeline of measures in collaboration with experts and the civil society.

The option of blacklisting employers that systematically violate labour legislation will be examined, also to prevent them from taking part in public procurement.

Measures are also planned to eliminate violations when a worker is hired for short periods of time as a way of bypassing legislation.

Oversight over agencies which provide workers to companies will be enhanced and agency workers will be guaranteed the minimum wage.

A better work-life balance will be pursued, including by introducing a right for workers not to have to answer messages from their employer in their spare time.

The coalition also pledges to draft, in collaboration with NGOs, a comprehensive system of effective integration of foreign workers and their families.

More Slovenian-language classes and other integration programmes will be provided for foreign kids at school and inter-cultural dialogue will be encouraged.

An employment strategy for EU workers and third-country workers harmonised with the needs of businesses and public sectors services is also planned.

The coalition pledges to pursue a coordinated migration and integration policy alongside measures to make life and work easier for foreigners.

Language proficiency requirements for third-country workers are to be softened.

As for long-term care, a comprehensive approach is planned with a new bill on long-term care, harmonised with key stakeholders, to be adopted by May 2023.

The partners promise that long-term care will be solidarity-based, fair and financially sustainable based on progressive taxation and other budgetary resources.

More funds to expand the public network of institutions providing long-term care will be provided, while waiting times to get a bed at a care home will be halved.

In housing, a priority will be drafting a crisis management plan to build and renovate rental homes, especially in areas where rents and the prices of land are highest.

To provide for 20,000 public rental homes by 2030, the coalition intends to strengthen the national Housing Fund and support other models of financing.

Property owned by the bad bank that is suitable for housing construction will be transferred onto the Housing Fund.

Legislation will be adopted to enable construction through housing cooperatives and a special guarantee scheme.

Legislative changes are also planned to encourage owners to put their flats on the rental market for an indefinite period of time, while regulation of rents and the rental market is also being considered.

Conditions for platform holiday rentals could be tightened in areas where there is a shortage of flats.

The coalition intends to give a special focus to the youth in housing efforts, while pledging that all policies regarding the young will be drafted together with them.

As for social policy, the coalition pledges to work hand in hand with the civil society, stressing eligibility for social transfers will be informed by clear criteria and fairness to serve "the people's needs".

The impact of income tax breaks on family and social policies will be examined and changes potentially made to enhance employment and social inclusion.

The option of gradually introducing universal basic goods for children and youth to provide for a regular income for living and education will be examined.

The coalition also plans to eliminate the measures that have decreased the right of the unemployed to freely choose employment and the right to unemployment benefit.

Prices of electricity and petroleum products will be regulated if necessary, especially to protect the most vulnerable groups.

STA, 14 May 2022 - As the future coalition partners are expected to initial a coalition agreement on Saturday, some details from the document have already leaked out. The agreement envisages changes in the pension and healthcare system, and there is a commitment to raise minimum wage to EUR 800 and minimum pension to EUR 700.

Some of the details of the agreement have already been revealed by members of the Freedom Movement, Social Democrats (SD) and Left in their public appearances.

Among other things, they announced that around 20,000 apartments with non-profit rent will be constructed in the next two government terms, and that minimum wage would be raised to EUR 800 net and minimum pension to EUR 700.

The plan is to eventually abolish top-up health insurance, and suspend the purchase of Boxer armoured personnel carriers (APCs). Procedures of procurement of military equipment under the government of Janez Janša will be reviewed.

The N1 news web portal portal has also noted the commitment that there will be no razor wire and other "technical obstacles" on the border with Croatia, erected to control illegal migration flow, by the end of this year.

Another proposal is that physicians from the public healthcare system will no longer be allowed to work for private individuals and concessionaires after they finish their shifts in public institutions.

Also in the works is progressive taxation of property, and the coalition will also advocate for the rights of employees to turn off their company phones and e-mail at the end of working hours.

According to the N1 sources, the agreement stipulates that the tax reform of the Janša government that brought higher net wages will be abolished at the beginning of next year.

The online edition of the newspaper Večer adds that the amount of the general personal income tax break will remain the same.

Companies, including start-ups, are expected to receive tax incentives for the digital and green transition, and the effective corporate income tax rate is expected to increase.

The coalition is also expected to promote employee participation in profit and their involvement in the ownership and management of companies, N1 says.

According to the portal, the government intends to launch talks with the EU institutions to amend the national recovery and resilience plan, and that EU funds will be used primarily to finance the green transition and digitalisation.

The coalition promises free school meals to all primary and secondary school students, and curricula in schools are also expected to be somewhat changed, N1 adds.

Večer notes mitigation of the rising energy prices with an emphasis on the most vulnerable groups, promotion of the development of solar power plants and replacement of heating devices on fossil fuel with those on renewable energy.

The future coalition also plans a pension reform that would strengthen the first pension pillar and encourage additional pension savings. In healthcare, it plans to establish updated records of waiting lines for treatment and procedures.

They also promise greater availability of physicians at the primary level, debureaucratisation and digitalisation of the healthcare system and additional financial incentives for the medical staff.

When it comes to the media, the future partners announce that the broadcaster RTV Slovenija and other public media (the Slovenian Press Agency - STA) will be provided with a status that will prevent political interference, Večer says.

They will also work on abolishing electoral units introducing preferential vote in the elections to the National Assembly, which will require a two-thirds majority in parliament.

According to information obtained by the STA, the coalition agreement will include a strategy for abolishing precarious work, where public administration would be an example. There is also the commitment to reduce abuse of part-time employment.

Other goals include a more transparent system of disability insurance, stronger network of public social welfare institutions, prevention of brain drain and a clear migration policy with employment strategy and comprehensive integration.

STA, 5 January 2022 - The statutory minimum wage in Slovenia is to increase by 4.9% to EUR 1,074 gross as of 1 January, reflecting the increase in inflation last year, the Labour Ministry has announced.

Minister Janez Cigler Kralj decided that the minimum wage for 2022 would be adjusted in equal amount to the rise in consumer prices in the past year after a second round of talks with social partners on Wednesday.

Under the minimum wage act, the wage is adjusted once a year at least to the rise in consumer prices. Available data from the Statistics Office shows annual inflation ran at 4.9% in December.

In a press release, the ministry said the minister's decision reflected the current macroeconomic forecasts, the uncertainty surrounding the Covid-19 pandemic and talks with the social partners.

The rise is much lower from the one proposed by the trade unions, who are disappointed, while the Chamber of Commerce and Industry (GZS) suggested it was too high and should be subsidised by the state.

The unions proposed a rise of 10.65% to EUR 1,133.35, Lidija Jerkič, the head of the ZSSS, the country's largest trade union association, told the STA.

They believe the rise should reflect not just the rise in living expenses but also economic growth, real wage growth, the fall in unemployment and in particular the most recent price hikes.

Jerkič said they also believed the rise should be more substantial because the minimum wage amount was based on minimum expenses from 2016, since when "these have increased substantially".

Meanwhile, the GZS said such a rise would be a major burden on businesses, in particular energy-intensive industries and small businesses.

They propose for the state to return part of the money raised through higher wage by granting a subsidy of EUR 30 per employee a month to the worst hit companies, following the model applied in 2021.

The GZS noted that the minimum wage had already risen by 8.9% last year despite consumer prices falling by 1.1% from December 2019 to December 2020, which meant the minimum wage rose by about a tenth in real terms.

The chamber also noted that Slovenia already has one of the smallest differences between the minimum and average wages in the EU. Data from 2019 shows the at risk of poverty rate of those in a job in Slovenia is 3.4%, 15-fold lower than for the unemployed, which shows the minimum wage does it job, said the GZS.

Meanwhile, Branko Meh, the head of the Chamber of Trade Crafts and Small Business (OZS), said they advocated for decent pay and decent work and were not preoccupied that much about the minimum wage.

"However, we do understand large companies, to which a five to ten percent rise in minimum wage means a substantial amount. Some are warning they will be forced into layoffs given such a rise," said Meh.

GZS executive director Mitja Gorenšček noted that the minimum wage could increase further once the government-sponsored bill raising the general income tax relief is adopted.

The new amount of minimum wage is expected to be released in the Official Gazette on 20 January and will apply for work done from 1 January.

STA, 11 February 2021 - Labour Minister Janez Cigler Kralj said on Thursday the minimum hourly pay for student work would be raised to EUR 5.89 gross this week. Thus he responded to criticism from the opposition Left and the Student Organisation that student pay had not been adjusted to the minimum wage raise.

Cigler Kralj said on Twitter that as soon as the minimum wage was raised (to EUR 1,024 gross) efforts had started to set the new minimum hourly pay for student work as well.

The Left noted today that the minimum hourly pay for student work had risen from EUR 4.89 to EUR 5.40 gross at the beginning of last year. Under the law, the minister is to change the minimum pay if the minimum wage changes, it said.

Based on the minimum wage raise, the minimum hourly pay for students should rise to EUR 5.89, the party noted.

The same call was made by the Student Organisation.

STA, 19 January 2021 - Labour Minister Janez Cigler Kralj has announced after meeting social partners on Tuesday that he will set the minimum wage for 2021 at EUR 1,024 gross. This is 120% of the minimum cost of living and the lowest possible rise under minimum wage legislation. Last year, the minimum wage stood at EUR 941 gross. 

The minister said the government intended to partly cover the raise for employers until the end of June with the option of a six-month extension.

The next anti-corona economic stimulus bill will thus bring a provision to lower the lowest base for social contributions from 60% of the average salary to the sum corresponding to the minimum wage. In this way the state would pay some 40% of the raise, Cigler Kralj explained at a news conference in Brdo pri Kranju.

This will be the second most important measure in the eighth economic stimulus bill, which will also bring an extension of the furlough subsidy scheme and some new measures to preserve jobs during the epidemic.

A new formula to calculate the minimum wage kicked in as of 2021 in line with the 2018 changes to the minimum wage act.

It says the minimum wage must be at least 20% but not more than 40% above the minimum cost of living.

The last time the minimum cost of living was calculated was in 2017, at EUR 613 for a single person. It will be next calculated in 2023.

This is what particularly bothers the trade unions, with Pergam head Jakob Počivavšek saying the raise does not take into account all the price increases since 2017.

Although some employers insisted on freezing the raise even at today's meeting with the minister, they now welcomed his opting for the lowest possible rise.

The director of the OZS small business chamber, Danijel Lamperger, told the STA he expected the state to keep the word about subsidising the raise.

Počivavšek meanwhile criticized Cigler Kralj for having decided how much to raise the minimum wage before meeting the social partners, saying he had announced the sum at the start of the meeting.

The ZSSS confederation said last week it hoped for almost the highest possible raise, which means the minimum wage would amount to some EUR 847 net.

The minimum wage for each year must be set by the labour minister after consulting social partners, and the sum must be published in the Official Gazette by 31 January.

Employer organisations were against the changes to the minimum wage act before they were being passed in late 2018, arguing many companies could not afford to raise wages.

During the corona crisis last year they wanted to persuade the government to freeze or delay the January 2021 raise, but the trade unions were strongly against.

The government came up with a compromise, proposing to delay the new formula until 1 April, with the government covering the raise until September.

Since both the employers and trade unions opposed it, the proposal did not make it to the last anti-corona economic stimulus law.

Statistics Office data shows that the average monthly gross pay in Slovenia in 2019 was EUR 1,754.

STA, 1 January 2020 - The statutory minimum wage is scheduled to increase in January under legislation passed in 2018. A new formula tying the minimum wage to cost of living will be used. Preliminary calculations show it will stand at roughly EUR 736 net.

Under the law, the minimum wage must be at least 20% and up to 40% higher than the minimum cost of living. The last time the minimum cost of living was calculated, in 2017, it stood at EUR 613 for a single person.

The Ministry of Labour, the Family, Social Affairs and Equal Opportunities has said the minimum wage will be set by the minister following consultations with social partner. It will be published in the Official Gazette on 31 January at the latest.

Slovenia introduced the minimum wage 25 years ago and it has been significantly increased several times since, most recently in 2019, when it stood at EUR 887 gross, and in 2020, when it rose to EUR 941 gross.

Employers have been warning for a while that some companies will not be able to absorb the higher wage and have asked the government to defer the scheduled increase. Trade unions have been fiercely opposed to the idea.

As a compromise, the government recently proposed that the new formula be postponed until April, whereby the state would pay for the increase through September.

Both employers and trade unions opposed this and the proposal, which was due to be included in the latest economic stimulus law, was shelved.

Sonja Šmuc, the director general of the Chamber of Commerce and Industry (GZS), said earlier this week that businesses would continue to push for a suspension of the increase and expected the government to cover the increase despite its compromise solution having been rejected.

She said that if the minimum wage did increase, "the price will be very high, in particular in the form of an increased number of jobless and the loss of quite a few companies in certain industries".

Šmuc has information some companies are preparing to relocate abroad because of the higher minimum wage. "We'll insist that a solution be found before January pay is due."

STA, 28 October 2020 - The Employers' Association (Združenje delodajalcev Slovenije - ZDS) called on the government on Wednesday to freeze the minimum wage for at least a year as part of the planned sixth anti-corona package. It also proposes a more flexible and simpler framework for teleworking and retiring upon meeting minimum retirement conditions.

"Employers are aware that each anti-corona package so far has brought upgrades of previous measures as well as new measures.

"Our proposals have been acknowledged during negotiations, however the Employers' Association has been noting an urgent need for certain labour market measures since March, measures that have not been included in the packages so far, and we expect them in the sixth anti-corona package."

The employers deem freezing the minimum wage a priority measure.

The new formula for setting the minimum wage, which enters into force in January, does not envisage coordinating the minimum wage with social partners; instead it excludes employers and trade unions from the procedure and puts the Labour Ministry in charge of determining the amount, said the association.

"The existing law has also never been discussed by the Economic and Social Council, it was adopted without social dialogue and without taking into account any of the arguments of businesses."

The Slovenian economy is in the middle of the gravest economic crisis in the past 70 years due to Covid-19, said the association, adding that the general consensus of opinion is that 2021 will not see recovery let alone results similar to those in 2019.

In such circumstances the economy cannot stand even minimum pressure in regard to labour costs, said the association, noting that any minimum wage raise, which would lead to pay raises in general, would be unimaginable during such a crisis.

A month ago, Sonja Šmuc, the director general of the Chamber of Commerce and Industry (GZS), said that GZS projections showed the minimum wage will rise by at least 9% based on the new formula that puts it 20% above the minimum cost of living.

She warned that the last substantial rise in the minimum wage a decade ago caused a structural unemployment situation and had a long-lasting impact.

Šmuc argued now is not the time to experiment with a new formula and urged that the minimum wage be preserved at current levels at least in 2021.

The opposition Left, which drafted the new law, responded to today's call by the Employers' Association by saying that the organisation had overlooked the needs of workers and their families in following its own interests.

"The new concept of the minimum wage, which is being introduced gradually, is a guarantee that no one who works will live in poverty," said the Left, adding that certain representatives of the capital were trying to prevent the realisation of this concept.

The party also said that employers had received a significant financial aid from the state, which is why the cost of the minimum wage raise would be "a drop in the ocean" compared to those amounts.

Another organisation that appealed to the government for help today is the Chamber of Commerce (TZS).

The closure of shops during the epidemic has aggravated the situation of retailers, warned the chamber, calling for the sixth stimulus package to feature aid for companies whose operations have been restricted or suspended due to anti-corona restrictions.

Non-grocery retailers are among worst-hit business sectors, said the TZS, adding that those that are required to be closed or partially closed generate 30% of Slovenia's total retail income.

Such companies have been pushed to the limits of financial capacities and jobs have been jeopardised, pointed out the chamber, deeming government aid vital.

The TZS proposes Slovenia follow Austria's example of a fixed-cost subsidy scheme to help retailers come out on top of the coronavirus crisis.

STA, 22 August 2020 - The gap between the minimum and average wages in Slovenia stood at 50.6% in 2019, which made the country the EU member state with the narrowest gap, data from Slovenia's Institute of Macroeconomic Analysis and Development (IMAD) shows.

Since Slovenia introduced the minimum wage in 1995, legislation has been amended on several occasions changing the manner in which the minimum wage is set or raised.

In 1995-1997, it was generally harmonised in the same manner as the base pay in the private sector.

In the following period until 2003, a mechanism was introduced basing its increase not only on inflation but also on GDP growth in real terms.

In 2004-2005, the minimum wage was set in a nominal sum, and rose more than the average pay in the private sector but less than if pegged to GDP growth in real terms.

The anticipated inflation was meanwhile the only indicator to which the minimum wage was pegged in 2006-2009.

In 2010-2018, the minimum wage was pegged to inflation from the previous year, whereas pay and employment trends, and the general economic situation could also be taken into account.

Under the 2018 changes to the minimum wage law, the amount set as the minimum cost of living will also be taken into account in setting the minimum wage as of 2021.

Over the past 25 years there have been two major minimum wage raises, which have brought the minimum wage closer to the average salary.

The first kicked in in 2010, when it rose from EUR 593 gross to EUR 734, but companies allowed to complete the transition until the end of 2011.

The changes from 2018 brought the other major increase, to EUR 887 gross for 2019 and to EUR 940 for 2020.

Also, as of this year, all bonuses, for instance for night shifts or Sunday work, were excluded from the minimum wage.

They are now calculated not as part of the minimum wages but separately, which further raised the monthly pay of workers on the minimum wage.

As of next year, a new formula will kick in under which the minimum wage will have to exceeded the minimum cost of living by at least 20%, but not by more than 40%.

All these changes have resulted in a narrowing gap between the minimum and average wages; in 2000, the gap stood at 40.3%, at 45.4% in 2010 and at 50.6% last year.

What is more, minimum wage growth has exceeded productivity growth throughout the last decade.

Slovenia is one of 21 EU members states which have the minimum wage regulated in a law.

The ratio between the highest and lowest minimum wages in the EU-21 is roughly 1:7, or 1:3 if measured in purchasing power standards.

Luxembourg has the highest minimum wage in nominal terms and in purchasing power standards, with Bulgaria and Latvia at the bottom of the list, respectively.

In terms of purchasing power standards, Romania has seen the highest rise in the minimum wage in the past ten years.

Together with Portugal, Greece, Malta and Spain, Slovenia places in the middle group in terms of minimum wage growth. Last year, the minimum wage in the group ranged from EUR 700 to 1,050.

The ratio between minimum and average gross wages in the EU members which are also OECD members meanwhile ranged from 33.1% to 52%.

Here Slovenia topped the list with 50.6% in 2019, followed by France, while Greece had the widest gap to the average pay, IMAD said in its latest analysis of the minimum wage.

STA, 4 July 2019 - The Ministry of Labour has come up with a calculation of the effect of the planned rise in the minimum wage in 2020 on the entire economy, establishing that, coupled with the elimination of bonuses from the minimum wage, it would cost the private sector EUR 197.1 million or 1.77% of the wage bill.

The calculation comes as a response from the government to the criticism from employer representatives about it having failed to make proper projections before adopting legislative changes raising the minimum wage.

In a recently published document, the ministry says that the effect of the raise of the gross minimum wage could be estimated relatively precisely based on data from previous years, while it is much harder to estimate the effect of the elimination of bonuses, as there are no relevant databases.

The ministry has established that the financial effect of the expected raise of the minimum wage in 2020 would be EUR 63.6 million or 0.57% of the wage bill, and the elimination of bonuses an additional EUR 133.5 million or 1.2% of the wage bill.

In commerce, where the number of employees on minimum wage is the highest, the added cost is expected to be EUR 37.3 million or 1.81% of the wage bill.

The ministry has assessed that the cumulative financial effects at the level of the entire economy will not be significant, while it is aware that they could be higher in industries with lower wages and a higher number of permanent bonuses.

It does not expect that a large number of companies will get into trouble considering that the total net profit posted by Slovenian companies last year increased by 16% and that the economic situation and the situation on the labour market are favourable.

Employer representatives are disappointed with the calculation, with Jože Smole, the secretary general of the Employers' Association, telling the STA that the analysis was very modest, featuring only three pages of text.

Smole is convinced that it does not take into account the complexity of the matter and is critical of the ministry for relying too much on the general data about profit and disregarding the possibility that companies which do not make profit would get into further trouble.

The Chamber of Commerce and Industry (GZS) reiterated in its response that it was against the changes to the minimum wage act, which it believes will hurt vulnerable individuals and companies the most.

The changes, which were passed last year without the approval of all social partners, raised the minimum wage this year from EUR 638 net to EUR 667 net, and next year it is expected to increase to EUR 700 net.

All our stories on pay in Slovenia are here

https://www.total-slovenia-news.com/tag/salary

STA, 5 June 2019 - Slovenia ranks ninth among 22 EU member states that have statutory minimum wages in terms of the gross minimum wage rate. This year's increase of the country's figure to EUR 886.63 was among the modest ones, says the annual report on minimum wages in the EU and Norway, published by Eurofound on Monday.

The highest rate was registered in Luxembourg (EUR 2071.10), while Bulgaria has the lowest (EUR 286.33).

The report of the EU Agency for the improvement of living and working conditions placed Slovenia among the countries with the lowest share of minimum wage earners - 4.1%. The country ranked sixth in this category, with Czechia (2%) ranking the lowest and Poland ranking the highest (13.7%).

The survey registered big differences among all participating countries in this category, noting that in 2016 the average share of minimum wage earners in the EU was 7.2%.

Eurofund also pointed at considerable differences between the gross and net rates, saying that in Slovenia a share of 24.77% of the total minimum wage value is contributed to the social security system, including taxes and contributions. The country's share is among the higher ones in that respect.

The survey said that almost all countries, excluding Latvia, had increased the minimum wage rate since January 2018, with Slovenia raising it by 5.2% in nominal terms. The increase was quite modest, listing the country as third in the group of six countries with mid-level minimum wage rates - Slovenia ranked behind Malta (1.93%) and Portugal (3.45%).

The issue of minimum wage rate has been in the spotlight recently. The National Assembly adopted the Left's proposal for the minimum wage act in December 2018 despite employers' opposition, thus raising the rate.

The act stipulates that all allowances will be excluded from the statutory rates as of 2020 and will thus have to be paid on top. It also regulates the rate's lower and upper limit, setting the bar at at least 20% and top 40% above calculated minimum living expenses.

Employers argue that the adoption was rash and will have a detrimental effect on the whole society, while trade unions are willing to protect the act by any means necessary. Meanwhile, the government keeps insisting that the risks are manageable.