20.03.07

The State Duma has accepted amendments to the law "On the Minimum Wage" in their third and final reading. The amendments will increase the Russian minimum wage from 1100 RUR to 2300 RUR per month from 1 September, 2007. Originally, deputies wanted to implement the increase in two steps: to 1400 rubles by May, and again to 2300 rubles by fall.

However, it was decided to introduce the change is one step because changes to the minimum wage create work-intensive tasks for the government, which measures fines and wages in terms of multiples of the minimum wage. The government must introduce changes into the budgets of all levels of the government, find additional funds for financing public-sector salaries, make changes to statutory regulations, and send out appropriate instructions to employers with each change.

Therefore a suggestion was made to increase MW starting 1 September 2007 “in order that all work would be done within the set time frame.” Deputies approved of the suggestion. Legislators also assure that new MW will not lead to the reduction of salary rates and bonuses, including payments for the labor in specific conditions and in specific territories because “MW is being separated from the unified wage rate scale and becomes simply a minimal salary wage.” “Businesses with difficult and harmful labor conditions do not pay minimal wages. There employees receive higher salaries and this law will not affect them.” In order to protect workers paid from the state budget, new law obligates the government to implement base salaries.

Deputies hope that an increase of the MW will stimulate creation of special salary tariff scales in different industries. Meanwhile, the salary wage for a full-time employee cannot be below the MW rate.

The amendments also allow the various territories of the Russian Federation to establish their own minimum wage based on local social and economic conditions and calculations of living wages so long as these local minimum wages are not below the federal standard. Local minimum wages are to be determined by the Regional Tripartite Commissions for the Regulation of Labor and Social Relations.

Furthermore, the amendments will not allow wages or salaries of any kind to be lowered based on the fact that they were established before the amendments were passed.