The Czech Republic is poised for a substantial increase in the minimum wage next year, marking a historic nominal rise, according to Marian Jurečka, the Minister of Labour and Social Affairs. The proposed increase amounts to 1600 crowns, setting the new minimum wage at 18,900 Kč, disregarding the appeals of employers who sought a rise of only a thousand crowns and trade unions proposing an increase of 2200 crowns.

This move represents the highest nominal increase in the nation’s history and signifies the government’s commitment to enhancing the earning potential of low-wage workers. Minister Jurečka highlights that the pace of minimum wage growth exceeds inflation, reaching 41 percent of the predicted average salary of 46,027 crowns, up from the current forty percent. The decision takes into account the delicate balance to ensure that companies can manage the wage increase without triggering layoffs, particularly in specific regions.

In addition to the minimum wage adjustment, there will be a partial increase in guaranteed wage levels, which establish the minimum earnings for various professions. For instance, the second level, akin to the minimum wage, will rise from 17,900 to 19,500 Kč, and the third level will increase from 19,700 to 21,300 crowns. The highest level is set to rise from 34,600 to 37,800 Kč. These changes will impact a significant number of workers, with 43,000 in the first level, 362,000 in the second, and 1,042,000 in the third.

While the proposed minimum wage increase is yet to receive government approval, Minister Jurečka envisions a change in the approach in the coming years. The Ministry has drafted an amendment to the Labor Code to ensure automatic growth of the minimum wage. Under this proposal, the minimum wage is expected to reach 45 percent of the average salary in the next few years. The guaranteed wage levels would be streamlined from eight to four or five. The minister anticipates amending the Labor Code in the first half of the year, ushering in a system where the minimum wage is determined automatically starting in 2025, while acknowledging the need for further discussions with trade unions and employers.

Article by Prague Forum