According to estimates by the Ministry of Labour and Social Affairs, the minimum wage in the Czech Republic may increase significantly in the coming years. Currently set at CZK 18,900 per month, the minimum wage could reach CZK 20,600 per month next year and CZK 22,100 per month by 2026, with an annual increase of CZK 1,700 proposed by the Ministry.
The Ministry of Finance’s economic forecasts made in April represent an initial basis, but are updated in August with more recent data. This update, required by law, may require adjustments in the financial plans, as in the state budget, to adapt to the new information.
The regulation, based on an amendment to the Labour Code recently signed by President Petr Pavel, provides for a gradual increase in the minimum wage until 2029. In addition, the amendment abolishes guaranteed wages in the private sector, which are specific minimum wages for different job categories. These will remain only in the public sector, guaranteeing minimum wage levels based on the nature of the work performed.
According to the Minister of Labour, Marian Jurečka (KDU-ČSL), the government continues to pursue a policy of gradually and steadily increasing the minimum wage, with the goal of achieving a minimum wage/average wage ratio of 47 % by 2029. This means that the minimum wage should be 47% of the average wage received by workers. For example, if the average wage is CZK 100,000 per month, the minimum wage would be CZK 47,000 per month. The minimum wage is expected to be approximately 42.2% of the average wage in 2025 and 43.4% in 2026.
The calculation of the minimum wage is based on the average wage expected for the following year. The government will establish a coefficient that takes into account purchasing power, the cost of living, the level and growth rate of wages, and productivity trends. The calculated minimum wage is then rounded to the nearest hundred kronor. If the newly calculated minimum wage is lower than the one currently in force, the latter will remain unchanged.
The guaranteed wage, which represents the lowest earnings based on the skill, difficulty and responsibility of the work and which is paid in eight steps from the minimum wage to twice the minimum wage, will be abolished in companies as of next year. This means that there will no longer be eight levels of compulsory minimum wages based on the difficulty and responsibility of the job in private enterprises. In the public sector, the guaranteed wage will remain, but will be reduced to four brackets. These brackets will range from the minimum wage up to 1.6 times the minimum wage, still guaranteeing minimum wage levels based on the complexity of the work, but with a narrower scale.
Parliament approved the change at the government’s proposal, despite criticism from the trade unions. The trade unions fear that this decision could lead to a reduction in income growth for many workers, a drop in their standard of living and an increase in the informal economy, where workers could be paid less than they should unofficially.
The final amount of the minimum wage for next year will be announced by the Ministry of Labour and Social Affairs by 30 September. By the same date, the Ministry will also announce the guaranteed minimum wage levels for the public sector.
Source: https://www.ceskenoviny.cz/zpravy/minimalni-mzda-by-mohla-pristi-rok-stoupnout-o-1700-kc-na-20600-korun/2505579 https://www.novinky.cz/clanek/ekonomika-minimalni-mzda-by-mohla-pristi-rok-stoupnout-40482700
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