An increase of the minimum wage in the real sector would entail a certain increase of the median wage, given that some companies sign employment contracts stating the minimum wage, while the rest of the salary is paid "under-the-table". In particular, it requires a sufficient period of time between the approval of a higher legal minimum wage and its entry into force ( eg at least several months, instead of only seven days since its approval, provided to employers for planning in 2014)Īssessing the impact of this decision. Any decision in this area must respect the principle of predictability in business.Where the state sets a legal minimum wage - the minimum threshold must be unique for both real and public sector.
Recommendations for Moldova include the following two key points: Once approved by the Government, this new requirement quickly enters into force, giving private businesses and the real sector of the state very little time to plan the future pay rolls.
The main argument the government uses to impose higher minimum wage requirements for private sector – the lack of financial resources, is also applicable to some representatives from the private sector. Otherwise we have a discriminatory practice for different employers. Although the practice of establishing a legal minimum wage exists in most EU countries, however, the common practice is to set a unique minimum wage, regardless of the sector in which the worker operates. Moldovan government regularly increases the minimum wage, but it does that differently to the real and budget sector, setting higher requirements to the real sector. This short commentary includes recommendations for future decisions of the government of Moldova in this respect. Even though the regulation is good news for some categories of workers, it involves some sensitive moments too. Thereby, as of May 1 st 2014, it will reach the 1650 MDL per month mark. On April 23 rd 2014, the Moldovan government approved a decision to increase the guaranteed minimum wage with 250 MDL in the real sector.
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