news department

Vedomosti, No 47, p.A3

The State Duma passed the second, main reading of the draft law to raise the minimum wage to 2300 rubles per month on September 1. Regions will have the right to set their own minimum wages, providing that authorities, employers and labor unions all agree on it. Employers not objecting to such a minimum wage change in writing within a month would be assumed to be in agreement with it. A regional minimum wage cannot be lower than the federal.

Last year, the Finance Ministry suggested that the minimum wage be raised from the current 1100 rubles to 1400 rubles. The United Russia Party insisted that it be raised to 2000 rubles. The United Russia faction was able to convince the ministry of to allow the change by separating the minimum wage from the unified fee schedule, which is now tied to the minimum wage. They will not change when the minimum wage is raised. The ministry was also convinced to include fringe benefits and allowances in the calculation of the minimum wage. Those payments can measure from 40 percent to 120 percent of a salary.

Initially, there was to be an intermediate raise in the minimum wage to 1400 rubles in May, but Andrey Loginov, the government representative in the Duma, objected that there was not enough time to prepare for it. According to Rosstat, the federal statistics service, in April 2006, 6.6 million people made less than 2000 rubles per month. Thus, the government practically admitted on Friday that changes in the budget would be necessary to raise the minimum wage, although the financial and economic section of the draft law states that "additional budget expenditures will not be required to raise the minimum wage," and the MPs are extremely resistant to budget changes.

In the draft law, it is also recommended that the 2008 federal budget contain the expenditures necessary to raise the minimum wage to the minimum cost of living by the end of that year. The MPs say that that should be 4300 rubles. No further minimum wage increases are being legislated, however.

March 19, 2007