Govt moves to cut certain contributions for some employers, raise minimum monthly wages for others

Thursday, 14 February 2019 10:09
REUTERS/© Yorgos Karahalis / Reuters
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By S. Papapetrou

At least three circulars are expected to be issued by the relevant labor and social insurances ministry next week in order to cut social security contributions by employers for their employees by as much as 50 percent, but only for wage-earners under the age of 25.

One of the coming circulars aims to increase wages for wage-earners employed at a business for more than three years, a move linked with a recent raising of the minimum monthly wage scale - a unilateral decision taken by the government outside the social partners framework for collective bargaining negotiations.

The raising of the minimum wage affects more than 111,000 businesses in the country employing more than 600,000 wage-earners, the ministry stated.

Raising the minimum monthly wage scale and abolishing a "sub-minimum" for new hirings under the age of 23 is one of several prominent measures taken recently by the decidedly poll-trailing Tsipras government, all ahead of three elections this year.

Beyond muted concerns expressed by European creditors at Eurozone venues, the hike was sharply criticized by most of the political opposition, which pointed out that if the annual tax-free income threshold is lowered on Jan. 1, 2020 to around 5,500 euros - a pre-legislated measure agreed to with creditors - then the vast bulk of the pay hike will simply be funneled into state coffers instead of wage-earners' pockets, while at the same time increasing labor costs for pressed SMEs in the country.

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