Minimum wage and minimum hourly rate in Poland from January 1, 2019.

According to the Labor Code, the guaranteed remuneration is called the minimum wage. The level of the minimum wage has been subject to heated discussions over the years between employers' unions, the government and trade unions. This time, the parties quickly reached an agreement and 2019 will be a good year for those who earn the least.

What is the minimum wage in 2019?

The "Solidarność" trade union postulates the introduction of a minimum wage in the amount of the average salary reported by the Central Statistical Office. The Central Statistical Office reported that the average monthly salary in Poland in August 2018 was PLN 4,800. The announced minimum wage in Poland is approaching this amount, so trade unions have a sense that they reached a consensus.

After the New Year, employees will be able to expect a salary of at least PLN 2250 gross, and the minimum hourly rate for contractors and self-employed persons will increase from PLN 13.70 to PLN 14.50 gross. Poland is one of the countries where the percentage of people earning the minimum wage is relatively high. Eurostat data from 2014 show that as many as 12% of Polish employees have to get by on the minimum wage. This is a significant group, so the government's decision carries a number of consequences.

Who will pay for the increase?

For employers, the increase will raise the cost of employing an employee by PLN 180. It seems, however, that employers will just have to swallow this bitter pill. Labor market experts emphasize that the difficulties in recruiting employees will continue to be the main problem for companies. Therefore, no wave of dismissals should be expected.

The level of the minimum wage is one of the indicators taken into account when determining the amount of social benefits, therefore the increase in wages also means higher budget expenses. On the other hand, 40% of the remuneration is taxed, so the higher the wage, the higher the budget income. It turns out, therefore, that the decision to raise the minimum wage is dictated mainly by the desire to find a source of financing for the government's expensive social policies.