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Govt poised to issue wage raise directive

A government decree setting an "expected level" of salary increase will replace the national wage recommendation if Parliament approves a bill put forward by two government MPs yesterday.

The government can set the level of salary increase for wages under HUF 300 000 gross without consultations, according to a proposal submitted by two MPs. The bill aims to maintain the net value of salaries of HUF 300 000 or less after the introduction of the flat-rate tax system early this year, which caused these salaries to decrease.

If passed, the bill will also authorize labor inspectors to check whether companies have adopted the salary increase directive defined in the bill. The salary increase will have to be implemented for two thirds of employees.

Companies caught denying a raise to their staff will not be fined, instead they will be barred from running in competitions for public procurement contracts, and will not be entitled to receive financial support from the state budget and other public money funds for two years.