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What does the new increase of the minimum wage from May 1 bring?

By Dimitris Katsaganis

In the disclosure of the time of application of the 2nd in a row increase of the minimum wage The Prime Minister, Mr. Kyriakos Mitsotakis, gave an interview yesterday.

He said the increase would take effect on May 1st. He also revealed that it will be “much bigger than the 2% increase” (valid from January 1).

Specifically, Mr. Mitsotakis stated that: “I have asked the Minister of Labor to immediately start the process for a second increase in the minimum wage, which will be implemented from May 1 this year. I believe that the increase in the minimum wage will be significant. It will be much bigger than the 2% increase that employees saw from January 1, 2022 “.

His information Capital.gr report that the impending increase of the minimum wage will rise between 5% -5.5% and, so that the gross minimum wage will rise to close to 700 euros.

In case the gross minimum wage reaches 700 euros, the net minimum wage will reach 601 euros (compared to 569 euros as of January 1, 2022) and thus a net increase of 32 euros / month will occur.

Prior to the increase in the minimum wage on 1 January 2022, when it amounted to 663 gross and 569 euros net, the gross minimum wage was 650 euros and the net was 558 euros. Therefore, in case the net minimum wage rises to 601 euros from May 1, its increase from December 31, 2021 will amount to 43 euros / month and 602 euros per year (43 euros / month X 14 months).

In the next few days, the consultation procedures for the minimum wage will begin based on the findings of scientific bodies of the social partners, but also of the BoG, IOBE, etc., as well as the proposals of the social partners. KEPE will reach a conclusion, which will be taken into account by the Minister of Labor, Mr. Kostis Hatzidakis before making the relevant proposal to the Council of Ministers, which will take the final decision. As Mr. Mitsotakis announced the implementation of the forthcoming increase from May 1, the relevant government decisions should be taken by April and specifically before or immediately after the Easter holidays (April 24).

It is recalled that from June 1, 2022, ie one month after the impending new increase of the gross minimum wage, there will be a new increase of 0.25% of the net wages of employees in the private sector – including those who are paid the minimum wage – due to the planned reduction of supplementary insurance contributions by 0.5% (0.25% for the contributions of the insured and 0.25% for the contributions of the employers). At the same time, there is a further reduction of contributions by 0.6 points (in the context of the implementation of the government commitment to reduce non-wage costs by 5 points in 2019-2023), which if it concerned the contributions of the insured and not only employers . If this happens, then employees, along with those who are paid the minimum wage, will see a further increase in their net salary.

A possible new increase of the gross minimum wage by 5-5.5% from May 1 will drag, by a corresponding percentage, upwards two other figures:

– OAED unemployment benefits (amounting to 23 in total), which are calculated based on the minimum wage.

– The salary they receive subsidized in OAED employment programs, such as in the community service program.

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Source From: Capital

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