Minimum wage will rise to €213.54 per week as from 1 January

Last Updated on Thursday, 26 October, 2023 at 8:49 pm by Andre Camilleri

The minimum wage will rise to €213.54 per week as from 1 January 2024, inclusive of the Cost of Living Adjustment, the government has said.

On Wednesday, the Prime Minister had announced that an agreement had been reached for Malta’s national minimum wage to increase every year for the next four years. Government whip and Parliamentary Secretary for Social Dialogue Andy Ellul then announced the details about the national minimum wage increase on Thursday, the agreement of which was unanimously signed by all employer bodies, unions and government representatives.

The increase of Malta’s minimum wage – which today stands at €192.73 per week, equivalent to €4.81 per hour will be adjusted to €200.73, plus the COLA which will be given in 2024, amounting to €213.54. At an hourly rate, the new increase is equivalent to €5.34 per hour.

Ellul said that the Low Wage Commission (LWC) was established in 21 March of this year through a Legal Notice, so that it can give recommendations to government as to what the national minimum pay should be.

He said that an agreement was signed unanimously in October by all employer, employee and government representatives after the Commission started the process of revising the minimum wage in April, which ended in October, earlier than deadline it was given, which was by the end of the year.

Ellul described this consensus as “historic” among all social partners – employer and employee bodies – where all parties listened and agreed to reach a balance, in favour of more productivity, a decent pay for workers, and transparency over minimum wage increases up until the end of 2027, where the Commission hopes to once again revise the national minimum wage and reach another agreement.

Chairperson of the Low Wage Commission David Xuereb said that the agreement will benefit the country’s workers, employees, and the economy.

Xuereb said he was satisfied that all members who participated had the chance to discuss and that agreement by all sides was reached, despite varying interests.

“Both sides, from workers to employers, realised the importance to listen to each other and work more towards a road of maturity, sensitivity and responsibility,” Xuereb said, thanking economist and technical expert Gordon Cordina for aiding with the agreement.

Vice Chairman of the LWC Mark Musu spoke about the previous agreement reached in 2017, which entailed that those on minimum wage would receive an increment of €3 per week after they’ve been working with the same employer for a year.

According to the 2017 agreement, those on basic minimum wage currently received €192.73 per week, those on minimum wage who have been employed with the same employer for a year receive €195.73 per week, and those who have been employed with the same employer for two years receive €198.73 per week.

The agreement entailed that in 2018, an additional €3 was to be given to individuals on minimum wage if they have been employed by the same employer for two years and in 2019, the remaining balance of the additional €6 (if they had still not been paid in full as long as the employee is in the third year of employment from the same employer).

Musu said that the Low Wage Commission – which was to be established in 2020 – took longer to be established due to the pandemic which disrupted the economy and labour market. The LWC was established at the beginning of 2023 in adherence to the EU Directive 2022/2041 of the European Parliament on adequate minimum wages, which stated that all Member States must adhere to the directive till 15 November 2024.

The terms of references for the LWC is to among others, determine if the minimum wage needs a revision, ensure that minimum wages are established to an adequate level, define the criteria for the national minimum wage, as well as to ensure the minimum wage’s adequacy in the process of revising and evaluating an adequate minimum wage with social partners.

Musu said that in 2024, the minimum wage will increase to €200.73 per week, in addition to COLA 2024. In 2025, the minimum wage is to increase to €203.73 per week, plus the 2024 and 2025 COLA.

In 2026, the minimum wage will further increase to €206.73 per week, plus COLA 2024, COLA 2025 and COLA 2026, Musu said.

In 2027, the minimum wage is to increase to €210.73 per week, plus COLA 2024, COLA 2025, COLA 2026 and COLA 2027.

Musu said that those who, in 2023, have a minimum wage varying between €192.73 and €198.73 per week due to yearly increments will, in 2024, receive an increase of between €2 and €8 per week, excluding the 2024 COLA.

Those who, in 2023, have a wage which is higher than €198.73 per week but lower than that proposed for 2024 (€200.73 per week) will receive the difference, and with it the 2024 COLA.

Musu said that the minimum wage for 2024, inclusive of COLA, translates into an increase of between €14.81 and €20.81 per week including COLA, on top of the current minimum wage.

Musu continued that between 2025 and 2027, the national minimum wage, according to recommendations made by the LWC, will increase by an additional €10 per week (€3 + €3 + €4), excluding the statutory COLA which needs to be given for the years 2025, 2026 and 2027 respectively.

“Therefore, it is being recommended that in total, the minimum wage between 2024 and 2027 will increase to between €12 and €18 per week excluding the COLA, which needs to be given in the mentioned periods,” Musu said.

Additionally, the minimum wage paid to those who are under 18 years of age will be increased by the same amount it will increase for the minimum wage paid to those who are 18 years of age and older, so that the difference between the two remains the same, Musu said.

Musu said that the next steps for the LWC is to continue its work according to its terms of references so that in 2027, another revision on the minimum wage could be carried out as needed.

Asked by the media to divulge how many people are currently on minimum wage, Musu said that based on estimates made in the labour force survey in 2022, there are around 2,000 full-time individuals on basic minimum wage. An additional 2,000 fall under the bracket of basic minimum pay with the additional increments, and around a further 2,000 receive a wage between €198.73 and €200.73.

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