CMNT_TITLE

Minimum Wage Fixing Convention, 1970 (No. 131) - Latvia (RATIFICATION: 1993)

Other comments on C131

Observation

Direct Request

Replies received to the issues raised in a direct request which do not give rise to further comments

2019

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Article 3 of the Convention. Socio-economic criteria for adjusting the minimum wage. The Committee notes the Government’s indication that the objective of Cabinet Regulation No. 413 of 22 July 2003, which aimed at progressively raising the level of the minimum monthly wage to 50 per cent of the monthly average gross remuneration by 2010, has finally not been reached owing principally to the limitations of the State budget and also the fact that the originally planned minimum wage increases were not implemented for several years. Subsequently, Cabinet Regulation No. 390 of 17 May 2011 was adopted, which establishes new principles for the determination and review of the minimum wage. Under the terms of the Regulation, the Ministry of Welfare, the Ministry of Finance and the Ministry of Economics draw up every year proposals regarding the amount of the minimum monthly wage based on the macroeconomic forecasts, the planned changes in the tax system, the evolution of the minimum wage in other Baltic states and the average annual value of the basket of subsistence minimum calculated by the Central Statistical Bureau.

The Committee notes that, by virtue of Cabinet Regulation No. 1096 of 30 November 2010, the minimum monthly wage was increased to 200 Latvian lats (LVL) (approximately US$370) as from 1 January 2011 and that due to economic instability, the risk of structural unemployment and the need for fiscal consolidation, it has been decided, in consultation with the National Tripartite Cooperation Council (NTCC), not to readjust the level of the minimum wage in 2012. The Government further indicates that according to a draft Cabinet decision, which should be discussed by the NTCC shortly, the amount of the minimum wage should remain unchanged in 2013. While noting the Government's explanations concerning the decision to no longer link the minimum wage to specific indicators and to review it annually based on an evaluation of the economic situation, the Committee requests the Government to provide further clarifications as regards the manner in which social considerations, such as the needs of workers and their families, the cost of living, and social security benefits, are taken into account in the annual revision of the minimum wage level. The Committee considers that the need to consider social together with economic criteria, as prescribed by this Article of the Convention, is all the more important in view of the considerable proportion of the workforce, i.e. 25.9 per cent in 2011, whose earnings are equal to the amount of the minimum wage.

Moreover, the Committee notes that according to the NTCC decision of February 2011, by which the Government's new methodology for fixing and reviewing the minimum wage was endorsed, the amount of the minimum wage should gradually reach the average annual value of the basket of subsistence minimum calculated by the Central Statistical Bureau. The Committee understands, however, that the subsistence minimum per inhabitant and per month stood at LVL173 (approximately $323) in 2011 whereas the minimum wage already amounts to LVL200 (approximately $370). The Committee requests the Government to provide additional explanations concerning the relationship between the minimum wage and the basket of subsistence minimum.