Even the FBiH Government cannot act on the minimum wage decision and increase benefits because it is under temporary financing!

Like a bombshell, the news broke today that the Government of the Federation of Bosnia and Herzegovina adopted a Decision on the amount of the minimum wage for 2025, which will amount to 1,000 KM. This decision applies to employees covered by the Labor Law of the FBiH, and the Government invoked Article 78 of the law, under which the Government prescribes the minimum wage, and the employer cannot calculate and pay the worker a wage lower than the wage determined by the collective agreement and the work rulebook.

Thus, on the penultimate day of 2024, the Government adopted a decision increasing the minimum wage from 619 to 1,000 KM, an increase of 381 KM or more than 60 percent, and consequently, other employer costs rise because tax rates have not been reduced. Not by a single mark, nor has the Government announced anything about it.

That is why at today's session of the Economic and Social Council, a vote was taken against the representatives of employers, who were caught off guard by the FBiH Government's decision, given that in recent months there was talk of a regulation that would ensure total worker income of no less than 1,200 KM. In that calculation, the minimum wage would be around 700 KM. However, today's Government decision has drawn numerous reactions from the business community, and great concern for jobs has been expressed.

In its decision today, the Government stated that additional funds are needed for the implementation of this decision to increase benefits for parent caregivers, in accordance with the Law on Parent Caregivers in the Federation of Bosnia and Herzegovina. Thus, the Government forgot about persons with disabilities, civilian war victims, i.e., those categories whose benefits are tied to the minimum wage in the Federation of Bosnia and Herzegovina.

On the other hand, a great burden has been placed on employers, who will have to reorganize their planned budgets, and mass layoffs, reductions in higher wages are already being announced, and it is questionable how many workers currently receiving the minimum wage will keep their jobs at all.

The Government's intention to protect about 270,000 workers in the FBiH and enable them to have higher wages and incomes was done without sufficient preparation and assessment, and without any other relief for employers. In this case, the winners are the workers, at least those who keep their jobs, but also the FBiH Budget due to higher tax payments.

On the other hand, the FBiH Government itself will find itself in trouble because this decision has created new financial obligations in the FBiH Budget, and implementation begins on January 1. However, the new budget has not been adopted, and today a decision on the temporary financing of the Federation of Bosnia and Herzegovina for the period January – March 2025 was established, which has yet to be sent to the Parliament of the Federation of Bosnia and Herzegovina.

"The decision establishes the temporary financing of the Federation of Bosnia and Herzegovina in the amount of 1,627,817,428 KM, based on the quarterly average of the execution of the Budget of the Federation of BiH in the period January – September 2024, and only those programs and projects that had execution in this period will be financed," the Government stated in its announcement.

On the same day it adopted the Decision on the minimum wage and claims to protect workers, the Government showed that it will not be able to implement its own decision because it is under temporary financing.

Knowing the working methods of the FBiH Government, as was the case with the adopted and then declared secret regulation on assistance due to increased living costs, which they ultimately put out of force, it is not excluded that the Government will surprise us tomorrow with some new decision.

However, the Government claims that in the FBiH Budget for the next year 2025, it will provide support for the most vulnerable categories of entrepreneurs after today's decision on the amount of the minimum wage in the Federation of Bosnia and Herzegovina, with the aim of preserving every job. And the implementation of the decision begins on January 1, and the Budget is still pending!

(A. Vrabac)