2020 is to bring an increase in the level of the minimum salary

Minister Elżbieta Rafalska has announced the expected growth of a minimal monthly and hourly salary beginning from 2020 in Poland. Currently, these amounts are 2250 PLN ($594) for a month and 14.70 PLN ($3.89) for an hour. For the next year, she assumes to have 2460 PLN ($650) for a month and 16 PLN ($4.23) for an hour. The stated amounts are for gross sums, before tax deductions.

According to the current scheme in Poland, the minimum wages are established each year. They are formed based on proposals of Polish labor unions and several Ministries and then are discussed with entrepreneurs’ Union to form the final amount agreed with everyone. This year, entrepreneurs say that the offer of Mrs. Rafalska is not in-line with the growth of labor productivity. Thus, they offer 2358 PLN as an equalized number. Officials also admit that the gap between 2250 PLN and 2460 PLN equal to 210 PLN (or $55.5) is rather high and challenging but the counterarguments of Mrs. Rafalska are based on the existing governmental strategy that there is a long-acting plan to make the minimum salary in the country equal to 50% of the average national salary.

The number, which representatives of business consider justified for 2020 is 2358 PLN (or $623) gross, while representatives of labor unions think that such would be 2520 PLN (or $666) gross. The business thinks that such increase shall inevitably lead to lowering the business’ profitability and competitiveness, making their product less attractive compared to cheaper products imported from other competing countries.

The expected effect is going to be distributed across 1.5 million employees in Poland. But there is another influence of such decision – in the form of increased pensions under the governmental scheme, which are to increase, as well as other related social contributions dependant on the amount of minimum wage in the country.