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Gov’t drops wage raise enforcement plan

Hungary's government has softened plans to sanction companies that fail to top up the wages of earners whose pay fell due to income tax changes enforced earlier this year, MTI reported on Thursday.

Antal Rogán, the Fidesz lawmaker who drafted the government's compensation scheme, said there would be no "wage commando" set up to enforce fines, but insisted that the government would find other ways to pressure companies into raising gross salaries below a monthly HUF 300,000 (€1,125).

Instead companies which fail to compensate their employees face being excluded form state procurements and EU funding competitions for two years.

He added that employers would not be forced to raise wages for every employee but rather for two-thirds of the target group, which means incentives for good performance can be applied.