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SMEs to bear brunt of minimum wage rise

A rise in the minimum wage from the start of 2007 is expected to hurt SMEs, farming and food companies the most, business daily Világgazdaság said on Friday.

The government estimates the increase will burden companies with an additional Ft 37 billion in wage costs. Companies employing 10-49 workers are expected to pay 40% of these extra costs. The increase will affect about 644,000 employees.
Under an agreement with unions and employers last year, the government decided to raise the minimum wage to Ft 65,500 a month from January 2007. However, employers will have to pay employees with secondary school diplomas or higher qualifications 110% of the minimum wage, and employees who have been with the company for more than two years must be paid 115% of the minimum wage.