Workers, employers, and unions await FBiH Government decisions: Minimum wage and decree on aid to be determined by year-end

By Amra Vrabac

The FBiH Government adopted the Decree on the payment of aid due to increased living costs at its session on December 11. This is a fact that the federal Prime Minister Nermin Nikšić informed the Speaker of the House of Representatives of the FBiH Parliament, Dragan Mioković, about in his letter and signature dated December 11, explaining why he was withdrawing the Bill on Amendments to the Income Tax Law, which was supposed to be on the agenda for the December 12 session.

However, the FBiH Government did not inform the public about this Decree. The content of the Decree, which was not known to the unions, the Employers' Association of FBiH, nor the ministers themselves before the FBiH Government session, was published in one media outlet on December 12, which caused various reactions from employers, workers, and the FBiH Government itself, which immediately declared the Decree confidential (secret).

Prime Minister Nikšić's Letter

It has been confirmed for Patria that no minister proposed the Decree, although given its content, it would have been logical for the Minister of Finance or the Minister of Labor and Social Policy to propose it. However, the decree came from Prime Minister Nikšić's office, prepared by his associates.

The content of the Decree also raised the issue of the minimum wage, which the FBiH Government determines at the end of the year for the following year. Therefore, it is even stranger that a Decree was adopted that directly relates to the minimum wage and employer obligations, without determining the amount of the minimum wage for 2025. Based on the published content of the Decree, financial experts, employers, workers, and even journalists have calculated how much money workers should receive from their employers in addition to their regular salary, based on the government's envisioned income of 1,200 KM.

Given that they were faced with questions for which they clearly did not have a ready answer, the FBiH Government's decision to declare the Decree confidential has raised suspicions that they did not carefully consider all aspects or conduct the necessary consultations, hence the sharp reactions from employers, who are even mentioning a large number of layoffs due to additional financial burdens and the short timeframe for preparation.

Nikšić, trying to mitigate the damage already done, avoided stating that they had adopted the decree on Face TV on December 14, instead speaking of a "prepared decree." Even then, he admitted that there were problems with employers and that additional consultations would be held.

However, it remains problematic that the Government has marked the Decree as confidential, and until the classification is removed, it cannot be published in the Official Gazette and cannot enter into force.

"Decrees with the force of law, decrees, and decisions are published in the 'Official Gazette of the Federation of Bosnia and Herzegovina,' as stipulated by the Law on the Government of FBiH.

Apparently, the Legislative Office has not provided an opinion on the Decree either, so the only way out was to hide it until all the details regarding the minimum wage and the mandatory portion that employers will have to provide for workers to have an income of 1,200 KM are determined.

The Alliance of Independent Trade Unions has stated that they support the Decree as a temporary solution, while the main demand remains the swift adoption of the law on the minimum wage. The Decree should be applied during 2025 or until a set of fiscal laws is adopted.

Employers, on the other hand, have not hidden their disappointment and have criticized the FBiH Government for not engaging in social dialogue and for making a unilateral decision.

"We proposed several solutions that are in line with enabling the payment of a portion of non-taxable allowances, to be a variable 450 KM, in terms of different amounts for workers to be motivating, and for each branch to individually agree on a minimum binding amount through collective bargaining, as not all branches are in the same position to pay," said Adnan Smailbegović, president of the Employers' Association of FBiH.

The panic that ensued in the Government after the adoption of the secret decree is shown by the threat of the Minister of the Interior of FBiH, Ram Isak, who publicly threatened that a criminal complaint would be filed if it was revealed who sent the Decree to the media.

Instead of the FBiH Government conducting public consultations regarding the Decree, consulting financial experts, employers, trade unions as representatives of workers, and ultimately the media to reach the best solution, the Government opted for the complete opposite scenario.

The FBiH Government has little time left to make a decision on the minimum wage for 2025, but also to finally announce the Decree on the payment of aid due to increased living costs so that employers can make the necessary decisions and proceed with amendments to employment contracts.

Although it was speculated that the minimum wage could be 700 KM, there is no confirmation yet that this will be adopted. What the FBiH Government should particularly consider is to also determine the minimum amount of meal allowance per day through the Decree. The meal allowance is 1 percent

of the average paid salary in FBiH per day. This amount is currently 13.69 KM because the average net paid salary is 1,300 KM.

However, most employers, especially in the private sector, pay 8 KM for meal allowance because a few years ago this amount was non-taxable, and the average salary was 800 KM.

To prevent workers from being solely dependent on the employer's goodwill, the Government could decide on some mandatory amount for meal allowance for workers, thereby increasing their total income, and this amount could be somewhere in the middle, between 8 and 13 KM.

Employers are already stating that with a potential minimum wage of 700 KM, instead of the current 619 KM, they would pay higher contributions.

The FBiH Government does not have much time to make the necessary decisions. Next week are the Christmas holidays, and decisions must be made before December 31.