In recent weeks, the Slovak Parliament has approved two laws that could substantially increase labour costs for employers in Slovakia. One amendment to the Minimum Wage Act raises the automatic determination rate of the minimum wage, while another introduces a new contribution to cover sports activities for employees' children.
Neither amendment has yet been signed by the president. However, given the current political situation in Slovakia, it is unlikely that he will veto these amendments.
Changes to the Minimum Wage Act
On 24 October 2024, the Slovak Parliament approved an amendment to Act No. 663/2007 Coll., on the Minimum Wage. According to this act, the minimum monthly wage is usually set through negotiation between employee and employer representatives. If an agreement is not reached by 15 July, it is consulted at the Economic and Social Council of the Slovak Republic by 31 August. If no agreement is reached even in this Council, the minimum wage is determined automatically.
Currently, if no agreement is reached, the minimum monthly wage for the next calendar year is set at 57 % of the average monthly wage in Slovakia from two years prior. Under the newly approved amendment, the rate for automatic increases will rise to 60 % of this average wage. This means that the minimum wage in Slovakia could reach EUR 1,000 per month by 2027.
The amendment also introduces a requirement for the Ministry of Labour, Social Affairs and Family to evaluate, at least once every four years, whether the criteria for setting the minimum wage ensure an adequate standard of living, reduce poverty, promote social cohesion and address wage disparities, including the gender pay gap. This evaluation should consider the purchasing power of the minimum wage, wage levels and distribution, wage growth rates, and the long-term level and trend of national productivity. A reference benchmark will be set at 50 % of the average nominal monthly wage in Slovakia for the relevant calendar year.
These new rules will first apply to setting the minimum wage for 2026.
Contribution for children's sports activities
Despite strong opposition from employers, the Slovak Parliament approved an amendment to Act No. 311/2011 Coll., the Labour Code. Under this amendment, employers with more than 49 employees will be required, upon request, to provide a contribution for the sports activities of employees' children. This contribution covers 55 % of eligible expenses, up to a maximum of EUR 275 per calendar year for all the employee's children.
For employees working part-time, the maximum amount of the contribution will be proportionately reduced. Employers with fewer than 50 employees will have the option, but not the obligation, to provide this contribution.
For the purposes of the law, the number of employees is calculated based on the average number of employees over the previous calendar year.
This amendment will take effect on 1 January 2025.
By Peter Devinsky, Counsel, Schoenherr
