The maximum salary will increase by the same amount as the minimum, not by the same percentage
Although the law sanctioning that "The maximum wage, for the effect of contribution, increases by the same amount and at the same time as the minimum wage at the national level" has entered into force, after its publication in the last official Gazette, the implementation his won't start now.
The director of the Social Insurance Institute, Astrit Hado, affirmed that the decision states that the implementation comes after the entry into force of this law.
This means that the moment the government decides on another increase in the minimum wage (currently it is 40 thousand ALL), then the maximum wage will increase by the same value and no longer in percentage. For example, if the minimum wage becomes 45,000 ALL, or 2,000 ALL more than today (+12.5%), then the maximum wage will increase by 5,000 ALL and no longer by 12.5%, as was the practice before.
This is a relief for high-wage employers and employees as until now, the maximum wage increased by the same percentage as the minimum wage, significantly burdening both employers and employees.
Meanwhile, high-wage employers and workers did not benefit from this relief when the minimum wage was raised in April, as the decision only came into force now, not having retroactive effect.
In April, the minimum wage from April 1 increased from ALL 34,000 to ALL 40,000, or by 17.6%. after the increase of the minimum salary, from June it increased and the maximum salary by 17.6%, from 149,954 ALL to 176,416 ALL.
So, while the minimum wage in value increased by 6 thousand ALL, the maximum wage increased by about 26.5 thousand ALL, significantly burdening both employers and employees.
While in the next revision of the minimum salary, the maximum salary will also increase by the same value and not by the same percentage.
The change was made after aggressively raising the minimum wage and any future increases to the minimum wage would raise the maximum wage too much. For example, if the minimum wage next year will be 45 thousand ALL, the maximum will reach 181.4 thousand ALL.
If the old law were to be applied, applying the same percentage increase, specifically 12.5%, the maximum salary would reach almost 200 thousand ALL./Monitor