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Croatia - Minimum Wages - 2009


LAST UPDATE

23 September 09

SOURCES


Name of Act

Labour Act of 17 May 1995 (Text No. 758), Narodne Novine, 1995-06-08, No. 38, pp. 1176-1210. As amended to 21 September 2004 (English translation as amended up to 21 September 2004), Narodne Novine, 2004-10-01, No. 137, pp. 5852-5891.

Name of Act

Collective Agreement on the Lowest Wage from 1998, Official Gazette-Narodne novine No 37 dated 18th March 2007,
between the Government of the Republic of Croatia and on the one hand the Employers’ Association of craftsmen, small and medium enterprises, savings and loan cooperatives and foreign representation of Croatia and on the other hand the Union of Autonomous Trade Unions of Croatia (Savez samostalnih sindikata Hrvatske), the Association of Croatian Public Serice Unions (Matia hrvatskih sindikata javnih sluzbi).

Only Croatian text. Search in the Official Gazette: Enter year: 1998 + Official Gazette Number: 37 search in the list under Number 7: Kolektivni ugovor o visini najnize place - collective agreement on the level of the lowest wage).

Name of Act

Decision made by Minister of labour and social welfare about expanding the scope of the Collective Agreement on the Lowest Wage of 1998 to all employers and employees in the Republic of Croatia, dated 16 March 1998, Official Gazette Narodne novine No 37 dated 18th March 2007.

Only Croatian text. Search in the Official Gazette: Enter year: 1998 + Official Gazette Number: 37 search in the list under Number 6: Odluka o prosirenju primjene Kolektivnog ugovora o visini najnize place - Decision on the extension of the application of the Collective Agreement on the Level of Lowest Wage.

Name of Act

Act on Obligatory Insurance Contributions of 6 March 1998, Official Gazette-Narodne novine No 147 dated March 2002.

Name of Act

Order of the minister of finances, dated 8 November 2006, regarding the basis of calculating contributions for obligatory insurances for 2007, Official Gazette-Narodne novine No. 126, 20 November 2006 (in force as of 1 January 2007.

Only Croatian text. Search in the Official Gazette: Enter year: 2006 + Official Gazette Number: 126 search in the list under Number 5: Naredba o iznosima osnovica za obracun doprinosa za obvezna osiguranja za 2007. godinu - Order of the amounts of basis for the calculation of contributions for obligatory insurance for 2007.

Name of Act

Minimum Wage Order from 1 June 2009 to 31st Maz 2010 (MINIMALNA PLAÆA ZA RAZDOBLJE OD 1. LIPNJA 2009. DO 31. SVIBNJA 2010. U REPUBLICI HRVATSKOJ).

Name of Act

Minimum Wage Bill 2008, of 30 May 2008, Official Journal 67/2008 of 09.06.2008

LEGAL DEFINITIONS


Employee/worker

A worker is a physical person who, in employment, carries out certain tasks for the employer.

According to the Act on Obligatory Insurance Contributions, a worker is a physical person who carries out certain tasks for the employer according to labour regulations and has obligatory insurance on that basis.
Labour Act §8(1)
Act on Obligatory Insurance Contributions §3(1)(29)

Employer

Within the meaning of the Labour Act, an employer is a physical or legal person for whom the worker, in employment, carries out certain tasks.

According to the Act on Obligatory Insurance Contributions an employer is a person for whom a worker with employment relation carries out certain tasks and on that basis is obliged to pay contributions: legal or physical person, representative or executive body of state authority, units of regional self-government and units of local self-government when a member of that body carries out duty in employment relation, foreign organisation with the seat in the Republic of Croatia which does not have diplomatic immunity (foreign representation, branch office, international organisation and institution), foreign physical person with permanent residence (or sea) in the Republic of Croatia or diplomatic mission and foreign country’s consular office and international organisation or representation with the seat in the Republic of Croatia which have diplomatic immunity.
Labour Act §8(2)
Act on Obligatory Insurance Contributions §3(1)(23)

MINIMUM WAGE FIXING


Procedure


Procedure in general

There is no statutory minimum wage as such in Croatia. The lowest monthly wage is established according to the terms of the Collective Agreement on the Lowest Wage from 6 March 1998, which stipulates that the lowest wage (gross) cannot be lower than the lowest basis for payment of pension and disability contributions stipulated by special regulations. The lowest monthly basis for the calculation of contributions is determined by the Act on Obligatory Insurance Contributions and equals the average wage multiplied by coefficient 0,35. The lowest monthly basis for the calculation of contributions is fixed by decision of the minister of labour and social welfare and is in practice identified with minimal wage.
Collective Agreement on the Lowest Wage
Order of the Minister of Finances
Minister of Labour and Social Welfare Decision 1998

Minimum wage set through decentralized collective bargaining

Besides lowest wage stipulated by Collective Agreement on the Lowest Wage, branch collective agreements stipulate the amount of the lowest basic wage for lowest complexity jobs, which is then the basis for calculating basic wage of certain workers. Following the provisions of collective agreements the basic wage of a worker is calculated in the way that the prescribed basis is multiplied by a certain coefficient of complexity and on that amount certain bonuses are added (for years of service, working conditions, night work, etc.). When taken into consideration the fact that about 40% of workers in Croatia are "covered" by collective agreements, one can easily conclude that there is a great number of workers, first of all workers by "mall employers", who, through collective agreement provisions, do not have a guaranteed minimum/lowest wage, that is a wage that would provide those workers and their families a decent life, but those employers are obliged to apply provisions of the Collective Agreement on the Lowest Wage which cannot be lower than the lowest basis for calculating contributions (2.298,00 HRK gross). Working conditions and material rights, hence wage, of workers in private sector are usually determined by an employment contract, which puts those workers in weaker negotiating situation so they accept the minimum amounts of wages while the rest is paid in cash.

Coverage


Scope

According to the decision made by minister of labour and social welfare about expanding the scope of the Collective Agreement on the Lowest Wage from 1998 to all employers and employees in the Republic of Croatia, all employers in the Republic of Croatia are obliged to respect provisions on lowest wage which in practice is identified with minimal wage.
Minister of Labour and Social Welfare Decision 1998

Scope

Besides lowest wage stipulated by Collective Agreement on the Lowest Wage, branch collective agreements stipulate the amount of the lowest basic wage for lowest complexity jobs, which is then the basis for calculating basic wage of certain workers. Following the provisions of collective agreements the basic wage of a worker is calculated in the way that the prescribed basis is multiplied by a certain coefficient of complexity and on that amount certain bonuses are added (for years of service, working conditions, night work, etc.). About 40% of workers in Croatia are "covered" by collective agreements consequently a majority of workers in the private sector do not have a guaranteed minimum/lowest wage through collective agreement provisions which is generally more favourable than the lowest basis for payment stipulated by the Act on Obligatory Insurance Contributions. However in some collective agreements like in retail and textile sectors the lowest wage is set even below that lowest base for calculation according to the Law on Contributions for Obligatory Insurance.

Specific minimum wage rates


» Specific minimum wage by sector

Besides lowest wage stipulated by Collective Agreement on the Lowest Wage, branch collective agreements stipulate the amount of the lowest basic wage for lowest complexity jobs, which is then the basis for calculating basic wage of certain workers.

» Specific minimum wage by region

No

» Minimum wage levels for specific categories of workers


» Trainees

No

» Youth

No

» Disabled

No

Level


Minimum wage level(s) in national currency

2.747 kuna (31 December 2008)
2.814 kuna (1 June 2009)
Minimum Wage Bill 2008
Minimum Wage Order 2009

Last minimum wage update

1 June 2009
Minimum Wage Order 2009

Rate of payment


» Monthly

Yes

Scheduled frequency of adjustment

The minister of finances announces till 30 November of the current year for the following year the amount of basis for calculating monthly contributions which are average wage multiplied by coefficient, announces the amount of the lowest monthly basis, the highest monthly basis and the highest annual basis for calculation of contributions.
Act on Obligatory Insurance Contributions §96(2)

Enforcement mechanisms


Labour inspection

There is no sanction in the case when an employer gives a worker the wage lower than the basic wage set by collective agreement. Mechanisms of control and implementation of extended Collective Agreement on the Lowest Wage are inadequate hence many employers give wages lower than those prescribed by the collective agreement.

Fines in national currency for non-respect of legislation

None

Results generated on: 26th October 2014 at 03:58:38.
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