Minimum wage set to rise by 37 per cent
THE monthly minimum wage for private sector workers is set to increase by around 37 per cent this month after new amounts were agreed by the Minimum Wage Determination Commission on Tuesday.
During the meeting, attended by Labour and Social Security Minister Hasan Taçoy and employer and employee representatives, it was recommended that the gross monthly minimum wage, last adjusted in July, should increase from 9,885TL gross (8,600TL net) to 13,563TL gross (11,800TL net). The net figure was 300TL higher than the government had initially suggested before the New Year.
The figures were published in the Official Gazette later on the same day, sparking a 10-day official “objection period”. If no formal objections are received, then the recommended rates will come into effect and be backdated to January 1.
Mr Taçoy said there are around 55,000 people earning the minimum wage, more than half of whom are foreign nationals.
Speaking to the press after the meeting, he said the government will provide social security contribution subsidies of 50 per cent to certain businesses that employ up to 10 people to help ease the blow of higher wage bills, while the prices of everyday goods will be “monitored regularly”.
Cyprus Turkish Employers Union deputy chairman Metin Arhun said the minimum wage figures are “much more” than what small business owners can afford to pay, warning that some shops may have to close down.
Free Trade Unions Federation (Hür-İş) chairman Ahmet Serdaroğlu, representing workers, said he had initially demanded an increase of 41 per cent but accepted an increase of 37.21 per cent “in order to reach a consensus”.
He warned, however, that the increase in the minimum wage will be cancelled out if the prices of consumer goods do not became more affordable.
Mr Serdaroğlu said some shops and supermarkets had already begun putting up their prices in anticipation of the new minimum wage rates.
“No matter what the minimum wage is, as long as there are no strict price checks in place and deterrent penalties imposed, the same debates will take place at every minimum wage meeting,” he said.
Prime Minister Ünal Üstel, speaking to Cyprus Today’s sister newspaper Kıbrıs after the new rates were announced, vowed to take the “necessary measures to protect the purchasing power of employees and pensioners against the cost of living”. He also said that the “market will be monitored to prevent unfair gains”.
RESIDENCY
While the higher pay will be welcomed by thousands of workers, it will also lead to a rise in a slew of fees, charges and penalties that are pegged to the minimum wage.
The British Residents Society has said the new minimum wage rates will lead to an “increase in the financial criteria that will be applicable to residency permit applications” and “likely result in a wide range of many other government charges also being increased”.
It said the new gross and net minimum wage rates should be used for “all financial calculations and supporting documentation, particularly for forthcoming Police Immigration appointments”.