Talks on Estonia's minimum wage for next year opened on Monday between the Estonian Trade Union Confederation and the Estonian Employers' Confederation, ERR News reports. The current minimum is EUR 946 a month, which equals 43 percent of the average wage.
The unions came to the table with the level set in the 2023 goodwill agreement, which would lift the minimum to 47.5 percent of the average wage next year. That means an increase of more than 4 percent and a figure above EUR 1,000. Kaia Vask, who chairs the union confederation, said the agreement signed three years ago foresees the minimum eventually reaching 50 percent of the average wage, and that people should be able to live on their pay while prices keep rising.
Employers accept that the minimum should go up but consider the unions' proposal too steep, and they will table their own figure in later rounds. Hando Sutter, chief executive of the employers' confederation, pointed to companies outside Tallinn and Tartu, where in his words jobs could disappear if the increase is more than they can bear. "The minimum wage needs to rise and the average wage has also increased, but the rate of increase must be something businesses can afford,"
he said. He added that energy prices this winter and rising input costs add to the uncertainty.
According to ERR News, around 20,000 people in Estonia earn the minimum wage. The rate also sets the minimum level of some benefits, among them parental benefits and unemployment insurance benefits, and in some areas kindergarten fees. At the start of the century the minimum wage was 30 percent of the average wage.
Source: ERR News, . The text above is our own summary; the words in quotation marks are the source's.
What this means for an Estonian entrepreneur
For an Estonian employer, next year's wage costs are now being negotiated. A company with staff paid at or near the minimum should prepare its budget for a rise, because both sides agree the minimum will go up and only the size is open. The unions' starting point is above EUR 1,000 a month; the employers' counteroffer will follow, so the final figure should be checked before payroll for the new year is set.
Our monthly accounting includes the payroll reporting a company with employees files every month, so a change in wages reaches the tax returns on time. Monthly accounting and payroll reporting