Unions and employers hope to agree minimum wage by Oct. 23

Estonian Trade Union Confederation (EAKL) chairman Peep Peterson.
Estonian Trade Union Confederation (EAKL) chairman Peep Peterson. Source: Siim Lõvi/ERR

Oct. 23 will be the last day minimum wage negotiations are finalized or the state conciliator will be asked to step in and find a solution, trade union representatives have agreed.

Representatives from the Employers Union and the Estonian Trade Union Confederation (EAKL) met on Friday to discuss the minimum wage agreement for next year which so far has not resulted in an agreement both sides are happy with.

The EAKL's chairman, Peep Peterson, told ERR at the meeting there was a feeling that both sides want to continue to reach an agreement without the need for the state conciliator. 

"Today the meeting gave us confidence that by Oct. 23 a new minimum wage agreement can be agreed and that we can negotiate and move on," Peterson said. 

He said at the same time that Oct. 23 is the last possible time they can reach an agreement without the state conciliator. 

Although the unions earlier negotiations reached a deal at the end of August to agree the minimum wage should be raised to €578 in 2020, the EAKL did not give their final approval.

For years trade unions have pushed for a minimum wage of at least 40 percent of the average wage for full-time work, which next year is expected to be approximately €600. It is estimated the average wage will be around €1,400 in 2020.

The current minimum monthly wage in Estonia for full-time work is €540 euros and the minimum hourly rate is €3.21. 

On Friday, Peterson confirmed to ETV's Aktuaalne kaamera that the EAKL wanted 40 percent of the Bank of Estonia's projected average wage which would be around €590. 

 "We do have to agree somewhere and also quietly lower expectations that it will definitely be €600. It is probably somewhere between those two numbers," said Peterson.

Head of the Estonian Employer's Confederation Arto Aas said to promise it would be €600 would be unrealistic. He also said entrepreneurs believe the economy might be about to hit a rough patch and that the use of envelope wages — paying wages in cash — could increase.

"If regulations establish a too-high minimum wage then one of the biggest risks is unemployment. Unemployment is already starting to increase because entrepreneurs cannot pay wages and more companies will go bankrupt and workplaces will disappear," he said.

Minister of Social Affairs Tanel Kiik said the minimum wage should be agreed by the time the state budget is adopted or by the end of the year.

"We need to know a concrete number since the minimum wage affects many different grants and price lists for local municipalities," he said. "And, of course, employers and employees need to know when concluding work contracts."

So far the budget has taken into account that the minimum wage will increase by 7 percent next year.


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Editor: Helen Wright

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