Minimum wage regulation
Slovenia has a statutory minimum wage which is governed by the Minimum Wage Act. It determines the right to a minimum wage and the manner in which it is determined and published. The last amendment to the law was published in 2018.
The main changes in the minimum wage regulation in the past ten years were the exclusion of all bonuses and business performance payments (in the period from 2016 to 2020) and in 2021 the enforcement of a new formula to calculate the minimum wage (see more under process of setting the minimum wage).
Actors involved in determining the minimum wages
The main actors involved in minimum wage setting is the government, specifically the Ministry of Labour, Family, Social Affairs and Equal Opportunities. Employers’ organizations and trade unions also play a role in statutory minimum wage setting. According to the Slovenian Minimum Wage Act (Article 4 and 6 of the Act) social partners (employers’ organizations and trade unions) must be consulted prior to setting the amount of the minimum wage and its yearly indexation. The consultation usually takes place in an established tripartite forum, the Economic and Social Council (ESS). Members of the employers’ organization on the ESS are The Association of Employers of Slovenia, Chamber of Commerce and Industry of Slovenia, Chamber of Craft and Small Business of Slovenia, Association of Employers in Craft and Small Business of Slovenia, Slovenian Chamber of Commerce. Members of the trade unions on the ESS are the Association of Free Trade Unions of Slovenia, the Confederation of Trade Unions of Slovenia PERGAM, the Trade Union Confederation 90 of Slovenia, INDEPENDENCE, the Confederation of New Trade Unions of Slovenia, the Slovenian Association of Trade Unions ALTERNATIVE, Trade Unions of Slovenia SOLIDARITY, and the Confederation of Public Service Trade Unions of Slovenia. Consultations can also be held on ad-hoc basis on invitation of the Ministry of Labour, not necessarily through the ESS (in which case, the invited social partners are usually those that are also members of the ESS).
Process of setting the minimum wage
The calculation of the minimum wage is based on a formula which takes into account the minimum costs of living. According to the Social Assistance Payments Act, the ministry responsible for social welfare shall determine the amount of the minimum cost of living on the basis of a comparable methodology at least every six years. A comparable methodology was defined in 2009 in a survey on the minimum cost of living (Stropnik et al., 2009). It was created on the basis of previous research on the same topic, especially research by Stanovnik and Stropnik (1998). It was also used in 2017 (Stropnik et al., 2017). The methodology is based on E. Engel's idea that the welfare of households is evident from their share of food expenditure in the entire family budget (Stropnik, 1997). The latest calculation of the minimum living costs was carried out in October 2022 and was published in the report of the Institute for Economic Research (Stropnik, 2022).
The minimum wage is usually adjusted once a year. It is determined by the minister responsible for labour after consultation with the social partners (legally, the outcome of which are not strictly binding, as the minister may deviate from the proposal) and published in the Official Gazette of the Republic of Slovenia no later than 31 January of the current year. The newly adjusted amount of the minimum wage applies to the payment of work performed from 1 January of the current year onwards.
The process of setting minimum wage has been the same since 2018 and no changes in social partner involvement in the setting and updating of statutory minimum wages have been made. No special bodies (e.g. expert committees) were established.
- Social Assistance Payments Act
- Stanovnik, T. and Stropnik, N. (1998): Raziskava o minimalnih življenjskih stroških (v angleščini: Study on Minimum Costs of Living). Institute for Economic Research, Ljubljana (link not available).
- Stropnik, N. (1997). ‘Revščina v Sloveniji: posledica ekonomske tranzicije. Končno poročilo raziskovalnega projekta, financiranega iz Research Support Scheme of the Higher Education Support Programme’. Ljubljana (link not available).
- Stropnik, N., Gregorič, M., Gabrijelčič Blenkuš, M., Rozman, U., Bočkaj, B. and Dobrila, I. (2009). ‘Minimalni življenjski stroški’. Institute for Economic Research, Ljubljana (link not available).
- Stropnik, N., Gregorič, M., Gabrijelčič Blenkuš, M., Robnik, M. and Švab, A. (2017). ‘Minimalni življenjski stroški’. Institute for Economic Research, Ljubljana.
- Stropnik, N. (2022). ‘Minimalni življenjski stroški’. Institute for Economic Research.
Criteria referred to in minimum wage setting
The current minimum wage act (Official Gazette, number 13/10, 92/15 in 83/18) stipulates that the gross minimum wage must be adjusted according to a formula which takes into account the minimum costs of living. The formula states that the minimum wage should be adjusted at least by the level of inflation of the previous year (December of current year / December of the previous year). The act also stipulates that the net minimum wage has to be set between 120% and 140% of the minimum living costs, which are calculated every six years. Therefore, in addition to the yearly adjustment by the consumer prices, every six years, the minimum wage is also increased to adhere to the minimum living costs criteria. This is done concurrently to the adjustment by consumer prices. In addition to the growth of consumer prices, wage trends, economic conditions or economic growth and employment trends can also be taken into account. However, these are not mandatory and do not involve any criteria.
This formula has been in place since 2018. After 2018, no minimum wage regulation changes have been made.
Criterion | How is this defined/operationalised? | Regulation or practice |
Growth in consumer prices | Year-on-year growth in consumer prices in December of previous year. | Minimum Wage Act (Official Gazette, number 13/10, 92/15 in 83/18, art. 3). |
Overall wage growth | Not specifically defined | Minimum Wage Act (Official Gazette, number 13/10, 92/15 in 83/18, art. 3). |
Economic conditions /economic growth | Not specifically defined | Minimum Wage Act (Official Gazette, number 13/10, 92/15 in 83/18, art. 3). |
Employment growth | Not specifically defined | Minimum Wage Act (Official Gazette, number 13/10, 92/15 in 83/18, art. 3). |
Coverage of the minimum wage and exemptions
The minimum wage is universally binding for every worker with a formal employment contract. No workers are exempted. In case of part-time employment, the minimum wage is calculated proportionally.
Subminima and higher rates
There are no subminimum or higher rates of the minimum wage, as the minimum wage is the same for every worker.
Frequency of payments and how the rate is defined
The minimum wage rate is defined on a monthly basis for a worker working full-time in formal employment (employment contract). Full-time work is defined as 36–40 hours per week (depending on legal or collectively agreed provisions). Workers are entitled to 12 monthly payments per year. A mandatory yearly holiday allowance must be paid by the employer once per year at least in the amount of the minimum wage.
What counts towards the minimum wage
With the change of the Minimum Wage Act on 1 January 2016, three bonuses/allowances were excluded from the minimum wage: they do not count towards the minimum wage, but must be paid on top of it. These bonuses are the night work allowance, the Sunday work allowance, and the allowance for working on public holidays and statutory days off. On 1 January 2020 all remaining bonuses were excluded from the minimum wage, such as allowances determined by laws and other regulations as well as collective agreements, a portion of salary for work performance, and payment for business performance, agreed upon by a collective agreement or employment contract. Holiday allowances also do not count towards the minimum wage, as workers are entitled to a holiday allowance once a year, which is a legal requirement. The holiday allowance must not be lower than the minimum wage amount and it must be paid to the employee no later than 1 July of the current calendar year.
Regular national report on minimum wage setting
No regular reports on the minimum wage setting are published in Slovenia. However, the report of the Institute for Economic Research (Stropnik, 2022) was published with the newly estimated minimum living costs, which is of key importance for determining the level of the minimum wage.
The following is a list of previous reports or related analyses on the calculation of the minimum living costs (in Slovene).
- Stanovnik, T. and Stropnik, N. (1998): Raziskava o minimalnih življenjskih stroških (v angleščini: Study on Minimum Costs of Living). Institute for Economic Research, Ljubljana (link not available).
- Stropnik, N. (1997). ‘Revščina v Sloveniji: posledica ekonomske tranzicije. Končno poročilo raziskovalnega projekta, financiranega iz Research Support Scheme of the Higher Education Support Programme’. Ljubljana (link not available).
- Stropnik, N., Gregorič, M., Gabrijelčič Blenkuš, M., Rozman, U., Bočkaj, B. and Dobrila, I. (2009). ‘Minimalni življenjski stroški’. Institute for Economic Research, Ljubljana (link not available).
- Stropnik, N., Gregorič, M., Gabrijelčič Blenkuš, M., Robnik, M. and Švab, A. (2017). ‘Minimalni življenjski stroški’. Institute for Economic Research, Ljubljana.
- Stropnik, N. (2022). ‘Minimalni življenjski stroški’. Institute for Economic Research.
Other country resources on minimum wages
- Laporšek, S. and Vodopivec, M. (2020), ´The economic effects of the minimum wage in Slovenia´, in Woźniak-Jęchorek, B., and Pilc, M. (eds.), Labour Market Institutions and Productivity: Labour Utilisation in Central and Eastern Europe (1st ed.), Routledge, London, pp. 212–236.
- Laporšek, S., Vodopivec, M. and Vodopivec M. (2021), ´Lowering wage inequality with the minimum wage increase in Slovenia´, International journal of sustainable economy, Vol. 13, No. 3, pp. 306–321.
- Rogan, D. (2020). ‘Minimum wage in Slovenia during the period of crisis and economic growth’. Institute of Macroeconomic Analysis and Development.