The law on minimum wage, what do you foresee, and why is it being rejected?

In brief points below, you can read more details about this law and why it has sparked reactions.

What is this law?

Its official name is “The draft law on changing and completing laws that define the amount of minimum wage efficiency, minimum wage-restment procedures and tax rates in annual personal income”.

In principle, it provides for the minimum wage in Kosovo to reach the value of 264 euros gross for all employed, public and private sectors.

The minimum wage in Kosovo is currently 130 euros for workers under 35 and 170 euros for workers up to 65 years.

The value of minimum wage in Kosovo has not changed since 2011 and is the lowest in Europe, according to the European Statistics Agency, Eurostat.

This law also changes tax steps in personal annual revenues, as well as the minimum wage setting procedure.

This law stipulates that the minimum wage value will have zero tax.

Under the law, the Kosovo government at the end of each calendar year determines the minimum wage, according to the Economic-Social Council proposal. But, in the absence of a proposal from this Council, the Ministry of Finance can submit a proposal for the minimum wage for Government.

According to a study by the Institute for Advanced GAP Research published in April, there are more than 100,000 workers in Kosovo receiving minimum wages. Over 94 percent of them are employed in the private sector.

When will it come into force?

There are also degrees until this bill comes into force and is transformed into law.

So far, the bill has passed several important phases. It was approved first read in the Kosovo Assembly on June 14th 2022.

While, on July 13, 2023, it has also been adopted in second reading in the Assembly.

With this, this law is considered approved by the Parliament, and after being signed by the Speaker of the Assembly, it must be sent to the country's president for signing.

Kosovo's constitution gives the president the right to rationally reject and bring the law back to the Assembly.

However, to overturn the President's veto requires at least 61 MPs to vote for the adopted law, which has returned to the Assembly and the law is considered declared.

The law eventually goes into effect 15 days after publishing in the Official Journal of the Republic.

Even after entering into force, each published law can be challenged by the Constitutional Court, and if this court claims to be contrary to the country's Constitution, it could declare it invalid.

Why was he opposed?

In addition to not being backed by the opposition, the Law on the minimum wage has faced fierce opposition from those benefiting from the pension schemes for 1998-99 war veterans in Kosovo.

That's because this Law doesn't envision the minimum wage bond with veterans' pension, as it has been in the past.

In particular, although the minimum wage is envisioned to rise to 264 euros, veterans will continue to receive pensions worth 170 euros, what is the minimum wage currently.

Regarding veterans, this law stresses that by the final classification of the Kosovo veteran government's list, with the Ministry's proposal responsible for finance, it decides on the extent of the amount of pensions defined by this law, depending on budgetary opportunities, cost of living and eventual inflation.

Following the vote in the Assembly, Faton Klonaku, the task leader of the Kosovo Liberation Army Veterans Organisation, has criticised that decision by MPs.

“Sic is learning from the media, after the opposition left the hall in the dark, MPs from this unscrupulous power have passed the Law on the minimum wage by removing KLA war veterans. We'll meet as the leading bodies and decide the steps we'll take”, he wrote on Facebook.

In Kosovo, the biggest employer is the private sector, with more than 220 thousand employed. The average gross salary in this sector is around 380 euros.

In the public sector, meanwhile, over 80 thousand people are employed, with an average gross salary of around 620 euros. /rel