24 May 2019 - Minister of Labour and Social Welfare Kemal Purišić said that the Government of Montenegro passed the Decision on determining the minimum wage in the net amount of 222 EUR, based on the proposal of the Social Council.
He noted that this amount of minimum wage was agreed through the negotiations between the Government and the social partners.
"The increase in the minimum wage, according to the agreement, will come into force from 1 July this year," he added.
The Labour Minister also pointed out that the Government tasked the Ministry of Finance to draft as quickly as possible and propose to the Government the amendments to the Law on contributions for compulsory social insurance, which will reduce the rate of contributions to health insurance at the expense of the employer by 2%.
He also said that the analysis showed that the increase in the minimum wage from 193 to 222 EUR in the net amount, while reducing the health insurance contribution at the expense of the employer, has the least negative effects on the employers who pay the minimum wages, but also the least negative impact on employment, budget revenues and the grey market.
"The newly established amount of 222 EUR represents 43% of the average salary in Montenegro, and the current amount of 193 EUR amounts to 38% of the average salary. At the level of EU member states, the average minimum wage is about 39% of the average salary," Minister Purišić explained.
He also stressed that when compared to the countries of the region, the minimum wage in Serbia is 231 EUR, in Bosnia and Herzegovina 208 EUR, in North Macedonia 196 EUR, and in Albania 211 EUR.
Minister Purišić also said that the main goal of the economic policy of the Government of Montenegro is to improve the living standard of citizens.
"One of the key indicators of living standards is gross domestic product per capita, which has continually grown in Montenegro, due to strong economic growth in recent years," Minister Purišić pointed out.
He added that since the growth rates of GDP have been high in the past three years, the Government, with this measure, wants to partly influence the growth of gross domestic product in order to further improve the living standards of citizens, stressing that the average salary in Montenegro is the highest when compared to the countries of the Western Balkans.
"Except for about 12,000 employees who have received the minimum wage so far, the benefit of increasing the minimum wage will also bee enjoyed by between 42,000 and 45,000 employees who receive a salary between 193 EUR and a new amount of 222 EUR," Minister Purisic emphasised.
He explained that this measure would influence the growth of the average gross salary in Montenegro for 6 EUR, and the average net salary by about 4 EUR, which through the adjustment of the amount will affect the level of pensions and social benefits of citizens.
"The Government and the social partners will monitor the effects of this measure on the social standard of employees, the costs of employers for salaries, the impact on investment and new employment, the risk of abolishing some jobs, the impact on the grey labour market, the impact on budget revenues and after that, budget preparation for the next year to launch new negotiations on possible increase in minimum wage," Minister Purišić concluded.
