FBiH Government in No Rush, ESV Session on January 31: No Decisions Yet on Measures to Help Employers

(Patria) - The decision on a minimum wage of 1,000 KM in the FBiH has been in effect since January 1, 2025, and to date, no acts have been adopted on support measures for employers, criteria for refunds or co-financing of contributions following the increase in the minimum wage.

A session of the Economic and Social Council for the territory of the Federation of BiH is scheduled for Friday, and the agenda will include consideration of proposed measures and legal acts of the FBiH Government regarding the calculation and payment of the minimum wage, as well as criteria for refunds or co-financing of contributions in accordance with the Decision on the Minimum Wage for 2025, and possibly other issues.

Last week, when the ESV session was held, protests by several thousand employers who own small or medium-sized enterprises and are affected by additional costs took place in front of the FBiH Government.

The FBiH Budget for 2025 allocates slightly over 100 million KM for subsidies of contribution costs, with the maximum amount per worker being 304 KM.

Regarding wage increases above 1,000 KM, the Government will prescribe by Decree that employers are exempt from paying contributions on the increased portion of the wage. The amount on which they will be exempt from payment is a maximum of 450 KM.

Given the unclear situation in which only the decision on the minimum wage is currently in effect, employers have decided to wait for the official decisions of the Government before making a decision on a possible linear wage increase.

However, data from just two employment services in Tuzla and Sarajevo show a trend of increase in the number of registered unemployed, most of whom come from employment. Consequently, new obligations arise for the payment of monetary compensation to which the unemployed are entitled if they have been employed continuously for at least eight months.

Regarding fiscal reform, the FBiH Government plans for the Parliament to adopt laws this year that will reduce contribution rates, but implementation cannot begin before 2026 without stabilizing the pension and health funds, which are mostly filled from contributions on employees' wages.