The Croatian Employers Association (HUP) is extremely worried by the caretaker government's decision to raise minimum wage by three percent, saying on Wednesday that instead of holding consultations and negotiations with the social partners, the relevant ministry just informed unions and employers at a meeting a week ago about the increase.
Less than 5% of employees in the real sector are on minimum wage, while most of those on minimum wage are in export-oriented industries such as the textile and timber industries, which have been hard-hit by the crisis, HUP said.
The government's one-sided decision is irresponsible and inappropriate because it was adopted at year's end, when all companies have adopted annual financial plans, and because it leads to unplanned additional costs for employers, said HUP director general Davor Majetic.
HUP advocated, and has the support of the unions in this, that the net minimum wage be raised without impacting the amount of operating costs by keeping the gross amount the same and increasing the net amount through other measures. "We suggest the state give up contributions on such wages, whereby the gross minimum wage would become the net minimum wage," Majetic said.