Employers tell the FBiH Government: Let's continue the economic and social dialogue we have just started, withdraw the decision

(Patria) - The Employers' Association in the FBiH wishes to thank all organizations, chambers, institutions, the academic community, experts, and the media who provided support in preserving the business environment and improving working conditions for workers and businessmen.

We also thank all employers who actively participated in media appearances to draw attention to the serious consequences of the recent Decision of the Government of the Federation of Bosnia and Herzegovina on the minimum wage for 2025, which threatens the survival of a large number of companies and jobs.

"Although we, as the Employers' Association and social partners, are always open to constructive dialogue with the Government and trade unions, the adopted Decision on the minimum wage, as well as the introduction of new burdens, are not the result of dialogue nor were they made in a transparent manner. The decision was not on the agenda of the Economic and Social Council of the FBiH but was suddenly placed under the miscellaneous item of the first working session, without a written proposal and analysis, and was adopted without prior consultations with social partners, which raises serious concerns about the social dialogue and the formal legality of this decision," state from the Employers' Association of the FBiH.

They add - as the Employers' Association, we had a clear intention to help workers and support the increase of minimum incomes. Our proposal for the Decree on Minimum Incomes, which we submitted in writing to the session and which is the conclusion of the Management Board of the Association, was to set the amount of minimum income at 1,000 BAM, of which 650 BAM would be taxable, while the remainder would be tax-free.

"This proposal was based on the earlier positions of the social partners that we all give up part of our interests in favor of workers' net income and that workers receive the desired amount of minimum wage, while the state would maintain the stability of contributions with a slight increase in revenue. Unfortunately, this proposal was rejected, which clearly indicates to us that there was no will for constructive dialogue nor for finding a sustainable solution. This rejected proposal shows that the Government decided to focus exclusively on contribution revenue and the budget, instead of on real support for workers and the preservation of jobs. We remind that the minimum wage was announced as the third step, after the adoption of the Law on Income Tax and the Law on Contributions!" the statement reads.

They emphasize that the increase in the minimum wage of 61.5% will result in increases in other wages in companies, which will mean significantly higher contributions, i.e., filling the budget, again at the expense of employers.

"This jump in costs will not be sustainable for a large number of companies, which could result in a reduction in the number of jobs. Although it is said, as some analysts note, about a possible increase in budget revenues of 800 to 900 million BAM, the question is how this will affect the real sector, which is already facing major challenges. Ultimately, it is clear that the Government's focus is not on workers and wage increases but on increasing the budget. The Government cites the successes of the economy in the Federation of Bosnia and Herzegovina with the argument that it achieved a profit of five billion BAM, part of which should be shared with workers, but it ignores the fact that the economy of the FBiH is not one company where this is evenly distributed, but the economy consists of 26,000 business entities, of which ten percent generate at least 80% of that profit, and that the vast majority, which employ the largest number of workers, have no room to cover such costs from profits, which could ultimately result in a huge number of terminations of employment contracts," it was said.

From the UP FBiH, they state: "This decision, instead of stimulating growth and development, may cause counterproductive effects, including mass layoffs, a reduction in the number of new jobs, a decrease in the competitiveness of the domestic economy, the non-arrival of the already small number of foreign investors, as well as additional pressures on the already overburdened business community. Given the current situation, the number of employers considering reducing the number of employees or closing businesses could significantly increase, which would have catastrophic consequences for the overall economy. The Employers' Association in the FBiH continues to fight for the stability of the economy, using all legal and lawful means, to ensure that this measure is repealed. We call on the Government to reconsider its decision and to proceed with its repeal as soon as possible in order to preserve the stability of the economy and jobs."