Minimum Wage in Estonia – Frequently Asked Questions

Is there a separate legislation relating to minimum wages in Estonia?

In Estonia the minimum wages are first drafted by the Confederation of Estonian Trade Unions and the Estonian Employers Confederation then signed by the government. The minimum wage that falls under the Labour Contract Act (in effect since 01.07.2009) is updated every 1-2 years and is signed as an amending statute. The current statute nr 166 (28.11.2013) came into effect 01.01.2014.

Do one or more minimum wages exist that is/are determined by law?

Statute 166 (28.11.2013) states the general minimum wage which applies to everyone except teachers in middle or high school levels who have a different minimum wage set by statute 179 (20.12.2013). This is because in Estonia teachers are considered to be highly underpaid, especially considering the nature of their work.

At what level are minimum wages determined at?

The general minimum wage is determined on a national level. There are also collective agreements in certain sectors (health care, road transport, etc) that set their minimum wages but are not signed by the government into law. The unions in Estonia are actively working towards minimum wages based on sector.

On what basis is minimum wage calculated?

Statute 166 (28.11.2013) states both the monthly minimum wage for full-time employees and a set minimum hourly wage.

In case of weekly/monthly minimum wage, are they based on any fixed number of hours?

The monthly minimum wage is for full-time employees. §43 of the Labour Contract Act (in effect 01.07.2009) states that full-time employees work 40 hours in a 7-day period and 8 h/day. Full-time employees usually work 8 hours a day for five days and have the weekends off, however this depends on the job in question, as well.

Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?

In Estonia the minimum wages are first agreed on by the Confederation of Estonian Trade Unions and the Estonian Employers Confederation, and then signed by the government.

How are upratings (adjustments) of minimum wage/s decided upon?

In Estonia the minimum wages are first agreed on by the Confederation of Estonian Trade Unions and the Estonian Employers Confederation, and then signed by the government.

Which are the components of minimum wage in Estonia?

There is only fixed component of minimum wages in Estonia.

How frequently is the fixed component of minimum wage updated?

The fixed component is usually updated every year even though there is no specific interval set.

What is/are the yardstick/s on which minimum wage upratings are based?

In Estonia the minimum wages are first agreed on by the Confederation of Estonian Trade Unions and the Estonian Employers Confederation, and then signed by the government. According to the 'Agreement establishing the principles for minimum wage setting from 2002 - 2008' between the Confederation of Estonian Trade Unions and the Estonian Employers Confederation the new minimum wage is calculated based on last year's minimum wage, mean gross wages and the predicted rise of consumer prices and wages. http://www.ilo.org/dyn/travail/docs/2489/Agreement%20establishing%20the%20principles%20for%20minimum%20wage%20setting%20from%202002%20-%202008.pdf

What is National Poverty line?

Click here to know the national poverty line in context with Minimum Wage, living wages and actual wages. Select the currency (Euro or national currency) to know national poverty line.

What is the incidence of minimum wages(s) in the national labour force (wage earners only)?

The incidence of minimum wages in national labour force is below ca 5%, equal to ca 5% and over ca 90%. The data is based on the Labour Research done by Statistics Estonia and has remained roughly the same for the years 2007-2012.

How is minimum wages compliance regulated?

The Labour Inspectorate which is a governmental body with local sections in the counties hears all complaints about wages.

Which legal sanctions can be applied in compliance is lacking?

The employee can appeal to the Labour Inspectorate which determines whether arrears are to be paid or not. This is the free option. Taking the matter to court can cost the employee around 1000 EUR, meaning that this option is rarely used. The new law (Labour Contract Act) states neither specific fines for violations on minimum wage payment nor generic liability for violation of any of the paragraphs. The newer Labour Contract Act is much more lenient on employers than the previous Wages Act. Eldring and Alsos (2012) write in European Minimum Wage: A Nordic Outlook that in Estonia no real sanctions are used against employers who violate the minimum wage statutes.

Are sanctions often being applied?

Even though there is no public data on the number on cases to do with minimum wage, over the last years the busiest year for the Labour Inspectorate because of the recession was 2009 with 6371 complaints. For the following years: 2010- 3803 complaints, 2011 - 2909 complaints, and 2012 - 2983 complaints. Based on the 'Overview of the Work Environment 2012' by the Labour Inspectorate.

Are employer and/or trade union representatives involved in compliance procedures?

Compliance procedures most often happen through the Labour Inspectorate which is a governmental body that has regional labour dispute commissions that are chaired by a member of the local labour Inspectorate and have an equal number of employees and employers.

To whom/Where can individuals complain, if they think they are earning less than minimum wage?

The Labour Inspectorate is a governmental body that processes complaints by employees. In reality the Labour Inspectorate has the power to force legal action upon all employers. Link: http://www.ti.ee/index.php?page=3&

Which month of the year is minimum wage rate revised in your country?

Minimum Wage is revised every January.