The interior ministry has proposed raising the minimum wage for "foreign" workers, Baltic News Service reports.
The hike would cover third-country, i.e. non-EU workers, but has not been well received by some in the business community.
Workers from Ukraine, for instance, particularly in the construction industry, have reportedly been employed in increasing numbers in recent years.
Interior minister Mart Helme (EKRE) proposes raising the minimum wage to 1.5 times that of the Estonian average, rather than matching the national average under current law.
Given the average monthly take-home pay before tax in Estonia is around €1,400 at present, this would be raised to €2,100 under the Helme proposals.
"We want a workforce that is qualified, and brings us elevated added value, to come to Estonia, not cheap labor that essentially does shoveling work here," Helme said.
However, employers say the move would damage business, given the labor shortage which already exists, and may prompt some companies to pull out of Estonia.
"There are definitely those who will cease production or activity, start producing something else," said Raul Aron, analyst at the Estonian Employers Confederation (Eesti Tööandjate Keskliit ), speaking to ERR current affairs show Aktuaalne kaamera Thursday evening.
Aron also noted that it could have a push effect on Estonian workers.
"The question is, what would the local workforce do and can they keep up with this development and earn some other better wage?" Aron said.
Tuuliki Poom, local business unit HR manager at the Estonian branch of multinational automation company ABB agreed.
"If such an obligation were to be imposed on us … it would certainly inhibit the development of Estonian companies, reduce foreign investment, diminish our competitiveness and reduce the development of the Estonian economy," Poom said.
Helme noted that the 1.5 multiplier was not set in stone, however.
"We have not set this one-and-a-half times average salary norm 100 percent. We are also prepared to exchange thoughts on this issue, and to listen to stakeholders and perhaps find a slightly lower figure. What is certain is that we do not want to see the lowest-paid labor force here," he went on.
The issue is likely to be discussed by the government in the coming weeks.
Editor: Andrew Whyte