How much the minimum wage to be? Which allowances to be increased?

Labour Minister Domna Mihaelidu submitted her proposal to the cabinet secretariat yesterday and the final decision will be announced by Prime Minister Kyriakos Mitsotakis on Wednesday 27 March.

If the increase is close to 50 euros gross, or 6.4 per cent, the approximately 600,000 workers paid the minimum wage or daily wage will see a monthly net increase of around 40 euros, as the amount in their pockets from 666.85 euros today will increase from 1 April to 705.96 euros. In addition, since they are also entitled to salary terms, so-called three-year periods, for beneficiaries from 1 January 2024, employees will see additional amounts, with the maximum amount reaching 1,079 euros gross, i.e. 781.8 euros net.

Minister of Labour Domna Mihaelidu submitted her proposal to the cabinet secretariat.

The new increase in the minimum wage will bring the government one step closer to its goal of a minimum wage of 950 euros and an average wage of 1,500 euros by the end of its four-year mandate. As of 1 April 2023, the minimum wage will be increased by 9.4 per cent to 780 euros gross for low-wage earners.

According to the recommendations of stakeholders and social partners, the recently completed process, the conclusion of experts and the Centre for Planning and Economic Research (KEPE), the increase will definitely be above inflation and close to 5 to 6.5 per cent in 2023.

Although the report is not binding on the government, it recommends increases of between 4 per cent and 5 per cent. In practice, this leads to an increase in the minimum wage by around 30 to 40 euros, thus increasing from 780 euros today to 811.2 to 819 euros gross respectively. According to economists and experts, the increase to be announced next week will be around 50 euros, which means that the minimum will be close to 830 euros.

In the consultation process, employers' and employees' proposals were abstained by 12 percentage points, as SEV, SETE, ESEE and GSEVEE proposed increases of around 3.5% to 5%, but GSEE proposed an increase of 16.4% (€128) to bring the new minimum to €908 gross.

It should also be noted that any agreed increase will lead to the adjustment of many benefits linked to the minimum level, including unemployment benefit, which around 140 thousand unemployed people receive. If the minimum wage reaches 830 euros, the unemployment benefit will increase from 479 euros today to 509 euros. Among other things, the following will also be increased:

- Special maternity allowance.

- Parental leave allowance.

- Allowance for released prisoners.

- Employer bankruptcy.

- Seasonal builders.

- Seasonal sanding labourers.

- Seasonal for artists, theatres, tourism.

- Private sector (forestry workers - resin collectors, tobacco workers, potters - bricklayers and maritime zone workers).

- Allowance for the self-employed.

- Work allowance.

- Compensation of EPAS students.

- Internship allowance (IEK DYPA).

- To gain work experience.

- Community benefit employment programmes.

- Employment programmes.

- Exam attendance allowance for working students.

In any case, the government will announce its final decision on Wednesday, taking into account the pressure on minimum wage earners on the one hand and the resilience of businesses and the economy on the other, as both the Minister of National Economy and Finance Kostis Hatzidakis and the competent Minister of Labour Domna Mihaelidu stressed during the previous period.