Minimum wage in Moscow from October 1, 2020: increase

What does the minimum wage regulate?

Before considering what the minimum wage is and what it includes in 2020, it is necessary to understand what this indicator is used for.
And also how a fixed minimum wage as a regulatory tool helps the state in ensuring the right of citizens to a specific level of income. The concept of minimum wage implies that the state provides a guarantee of wages to the employee to maintain an acceptable standard of living. The lower limit of the “minimum wage” established by the state is an administrative and economic tool for regulating not only the actual amount of citizens’ incomes, but also socio-economic issues in society.

By establishing a minimum wage, the state guarantees the employee protection from excessively low wages, which are often set by employers. It is also worth considering that federal social payments depend on the minimum wage.

The value of the minimum rate in the Russian Federation according to the Labor Code of the Russian Federation cannot be lower than the subsistence level (LM) (Article 133 of the Labor Code of the Russian Federation). However, this statement has not been followed to date. The “minimum wage” did not keep up with the growth of the monthly salary. Only since January 2020, the minimum wage and minimum wage values ​​have been brought to a single level.

Compliance with the value of the “minimum wage” is mandatory, regardless of the method of adoption. The legislation provides for the establishment of:

• the federal minimum wage, which is adopted by the State Duma;
• subjects of the federation. The minimum wage is established by concluding an agreement between local authorities, representatives of trade union organizations and the association of employers in regions, territories, regions and municipalities. The minimum wage of a constituent entity of the federation should not be set below the national level.

What is the minimum wage made up of?

The minimum wage for an employee in 2020 is calculated in the amount of 12,130 rubles. What is included in the minimum wage in 2020, and are compensation and incentive payments included in the minimum wage?

Let's find out what payments are included in the minimum wage:

• the main part of the “minimum wage” is the salary, which is assigned to the employee according to his position and qualifications;
• allowances and additional payments that compensate for unfavorable and harmful to health and life-threatening working conditions, as well as other types of compensation that are included in the employment agreement;
• monetary rewards that stimulate employee motivation. These include incentive bonuses, additional allowances and additional payments. Bonuses are paid for achievements and production results in an employee’s work. Bonuses are given to holders of academic degrees, for length of service, etc.

If the salary is calculated only from the salary amount without accruing additional payments, then the salary cannot be set less than the minimum wage. If the salary is still below the “minimum wage,” what is included in the minimum wage when calculating wages in 2020? In this situation, the employer will have to use additional payments to bring the salary rate to the mandatory minimum wage level.

In situations where compensation and incentive payments are established for the employee in addition to the base salary, it is possible that the salary is less than the minimum wage. But the final salary, taking into account all payments, has no right to be set below the minimum payment (Article 133 of the Labor Code of the Russian Federation).

In both cases, from an accrued salary of at least 12,130 rubles, a personal income tax of 13% is withheld from the mercenary. Therefore, in fact, the employee will receive: 12,130 x 13% = 10,553 rubles, which, in fact, contradicts the principle of social protection for workers. In most countries, the minimum wage indicator is removed from the tax field.

It is worth noting that the interpretation of the minimum wage, according to the Labor Code of the Russian Federation, allows employers to manipulate when setting salaries for employees. For employees, even with specific qualifications, a rate is set below the minimum, and then, with the help of additional payments and compensations, they are brought into compliance with the minimum wage. This practice not only distorts the real state of affairs in determining the actual level of the minimum wage, but also the principle of protecting the social and labor rights of workers.

Minimum wage in Russia

Let's look at a table that shows the dynamics of growth of the indicator by year - from 2008 to 2020.

Based on the tabular data, we can conclude that in recent years there has been an active growth rate of this indicator. The closer we get to 2017-2018, the more the minimum wage increases. In practice, there are several cases in which the recalculation of this value was observed 2 times a year, in particular in 2020, 2020, and changes occurred twice a year in 2001, 2005.

Incentive accruals

Why is incentives included in the minimum wage? The conditions for accrual of incentive payments are set out in local regulations of enterprises and organizations or collective agreements between the employer and employees. If bonuses are paid monthly, then the accrued amounts are constantly added to the minimum payment. However, the payment of incentives is not an obligation assigned to the employer, it is his right.

Are annual, quarterly, or one-time bonuses included in the minimum payment? In practice, this issue caused certain difficulties, since it did not receive an accurate interpretation in the Labor Code of the Russian Federation. Based on the ruling of the Supreme Court of Karelia No. 33-2448/2018 dated 06/05/2018, it was established that such payments are also subject to inclusion in the minimum wage component.

Let's see what other charges are included in the minimum wage. Compensatory additional payments for work on night shifts, weekends and holidays are calculated at increased rates and, accordingly, are accrued above the minimum wage. However, if this work is carried out within the framework of established duties and fixed standards of labor and working hours, then compensation is accrued within the “minimum wage”.

Additional payment for harmfulness refers to a compensation payment, which is determined by the work regime and special working conditions of employees (Article 129 of the Labor Code of the Russian Federation). Since this payment is a component of wages, it is calculated within the limits of the minimum wage.

Disputes about the composition of the minimum wage

Disputes about what is included in the minimum wage have been going on for several years. The parties refer to letters from Rostrud, outlining various positions, and judicial practice, which is also contradictory.

Until September 1, 2007 Art. 129 of the Labor Code of the Russian Federation (hereinafter referred to as the Labor Code) contained a provision according to which the minimum wage for hired labor did not include social, incentive and compensation payments. For example, bonuses or compensation for overtime work were clearly not included in the minimum wage.

But then Art. 129 of the Labor Code came into effect in an updated version, and this norm lost its legal force (Law No. 54-FZ of April 20, 2007, Art. 2). There are no explanations of what exactly is included in the minimum wage amount in the code or other legal sources. Therefore, many employers have decided to include any additional payments in the “minimum wage”: regional coefficient, night work, employee leave on a holiday, etc. Not all employees agreed with this and sought protection in the courts.

On March 10, 2010, the Supreme Court published a Review of judicial practice in civil cases for the 4th quarter of 2009, where it outlined its opinion on what constitutes the minimum wage. The department considered that compensatory, incentive and social additional payments to earnings are accrued in excess of the minimum wage. However, three months later the Supreme Court withdrew its position on this issue.

What accruals are not included in the “minimum wage”

When calculating the minimum wage, those payments that are not related to the payment of the main job, in accordance with established labor standards and working hours, are not taken into account.

Part-time work refers to work performed during free time from primary job responsibilities. The payment will be added beyond the minimum wage if the number of labor hours established by the standard is exceeded (Letter of the Ministry of Labor No. 14-1/OOG-7353). The same principle applies to overtime premiums.

Regional coefficient. This indicator is established for areas with unfavorable and severe climatic conditions (Article 148 of the Labor Code of the Russian Federation) and implies an increased salary. Resolution of the Constitutional Court No. 38 of December 7, 2017 established that regional coefficients and additional payment for each year of work in the Far North and areas equivalent to it are not included in the “minimum wage” component.

This rule applies not only to the minimum wage indicator, but also to the minimum wage. If the minimum wage is already set above the federal minimum wage, northern additional payments are made based on the minimum wage, if it does not include them.

Salaries for public sector employees

For public sector employees, wages vary depending on the field of activity of the civil servant. Employees of the Presidential Administration have the highest level of well-being; the average salary in this area is about two hundred thousand rubles.

Spetsstroy employees receive about one hundred and twenty thousand rubles. Next on the list of the highest paid professions in the public sector are citizens who have high positions in the Ministry of Emergency Situations; their earnings can reach up to 115 thousand rubles per month. Employees of the prosecutor's office and court receive slightly less, but nevertheless their income can reach up to 110 thousand rubles per month, and in some cases more.

The amount of earnings of public sector employees in the regions can vary quite significantly, this is largely due to the different standard of living of a particular subject of the Russian Federation, as well as existing climatic factors.

Starting from 2020, a new tariff scheme for calculating salaries of public sector employees has been in effect. The earnings of working citizens now consist of salary, bonus payments, allowances and additional payments for length of service.

Minimum wage and minimum wage - what is the difference

Sometimes the concept of minimum wage (MW) is identified with the minimum wage, but these concepts are not the same thing. The employer must adhere to these values ​​when determining the employee’s earnings.

The minimum wage is accepted by the constituent entities of the Russian Federation not less than the lower limit of the employee’s remuneration, which the employer does not have the right to violate (Article 133.1 of the Labor Code of the Russian Federation). The minimum wage is introduced taking into account the characteristics of the regions and corresponds to:

• socio-economic needs of the constituent entity of the Russian Federation, taking into account the size of the PM;
• mandatory for all categories of employees in a particular region with the exception of employees of federal structures;
• the minimum wage indicator cannot be used below the federal minimum wage.

The adoption of the minimum wage is not mandatory for the constituent entities of the Russian Federation; in calculating wages, they have the right to adhere to the federal minimum wage.

Introduction of a new minimum wage

Already from October 1 of this year, a minimum hourly wage for workers will be introduced. This innovation was regulated by the authorities in a special provision, which is aimed at restoring the country’s economy. Separately, it is necessary to dwell on the fact that the new document stipulates the minimum hourly rate for workers whose employment is part-time and who have been working for three months or more.

It is believed that the introduction of such measures will make it possible to more effectively combat unofficial wages for working citizens, which should protect the interests of the employee.

Procedure for accepting minimum wage

The minimum wage indicator is introduced based on the signing of an agreement by a tripartite commission between representatives:

• local authorities;
• employer communities;
• representatives of the interests of trade union workers.

As a result of negotiations, a decision is made to accept the agreement, which is published in an official source. After reading the agreement, employers either accept the terms of the document or have the right to refuse it within thirty days from the date of publication. In case of refusal, a written reasoned refusal is drawn up with documentary evidence of each argument.

The commission considers the refusal of the employer who is invited to the meeting. The employer has no right not to attend a meeting of the collegial body.