Saturday, 25 June 2022

Law on Personal Assistance to Increase Number of Beneficiaries and Wages of Personal Asisstants

ZAGREB, 25 June 2022 - The law on personal assistance, which is likely to be enacted in Croatia in 2023, will very likely increase the wages of Personal Assistants (PAs) by 50% and also an estimated 15,000 persons with disabilities will be entitled to use the services of personal assistants.

"The new law will improve the quality of life of persons with the highest disabilities, as they will be entitled to more hours of personal assistance services and thus they will manage their time better, " Marica Mirić, a vice president of the Croatian Union of Associations of Persons with Disabilities (SOIH), Marica Mirić.

Furthermore, services of personal assistance also ease the burden on the families, she said in an interview with Hina.

The new legislation will pave the way for higher employment rates among persons with disabilities.

According to a time frame for the adoption of the law, the draft bill is to be forwarded to the government this autumn, and the parliament is expected to adopt it until the end of the year, according the information provided by the Labour, Family Affairs and Social Policy Ministry.

Awareness has been raised for years about the need for the adoption of legislation on personal assistance, and the issue has recently grabbed public attention when a former member of parliament, who is a person in wheelchair, went public with her unfortunate experience when her personal assistant attacked and robbed her in her flat.

There are several types of personal assistance services: services for persons with physical, mental and intellectual disabilities, personal attendants for visually impaired persons, communication assistants for deaf persons and assistants for deaf-blind service (DBS).

So far personal assistance services have been organised through programmes and projects of civil society associations, which are funded by the European Social Fund and the state budget.

The adoption of the law will regulate this area better, and define the models and contents of the services, entitlements to the services, qualifications for employment of personal assistants, monitoring and supervision of provision of services, possibilities for compensation for damage and financing.

In March this year, Croatia had 612,212 persons registered with various kinds and degrees of disabilities.

According to the social policy ministry, 2,312 persons with physical or mental disabilities used services of 2,292 personal assistants, according to a state of affairs registered in May.

Furthermore, 3,654 beneficiaries used services of a total of 99 communication assistants.

There were 67 personal attendants for 1,537 beneficiaries with visual impairment.

According to the ministry, the allocation set aside annually for all those services is HRK 148 million (approximately 20 million euros).

The ministry estimates that the potential number of users of personal assistance services can rise to 15,000 upon the adoption with the law.

Tuesday, 7 December 2021

EU: Council Agrees Position on Two Labour-Related Draft Laws

ZAGREB, 7 Dec, 2021 - The Council of the European Union on Monday agreed a common position on two draft laws - on pay transparency and on adequate minimum wages in the EU. 

The Employment, Social Policy, Health and Consumer Affairs Council, which was attended by the Croatian Minister for Labour, Pension System, Family and Social Policy, Josip Aladrović, agreed the common position based on which member states will negotiate with the European Parliament the final texts of the two laws.

The proposal on pay transparency should help tackle the existing pay discrimination at work and close the gender pay gap. It aims to empower workers to enforce their right to equal pay for equal work or work of equal value between men and women through a set of binding measures on pay transparency.

Member states agreed that employers have to make sure their employees have access to the  objective and gender-neutral criteria used to define their pay and career progression.

In accordance with national laws and practices, workers and their representatives have the right to request and receive information on their individual pay level and the average pay levels for workers doing the same work or work of equal value, broken down by sex. Employers also need to indicate the initial pay level or range to be paid to future workers – either in the job vacancy notice or prior to the conclusion of the employment contract. 

The gender pay gap in the EU stands at around 14%, which means that women earn on average 14% less than men per hour. There are a number of inequalities underlying this pay gap. Women are overrepresented in relatively low-paying sectors such as care and education, the so-called glass ceiling leads to their underrepresentation in top positions, and in some cases women earn less than men for doing equal work or work of equal value.

The Council also agreed on a proposal for a directive on adequate minimum wages in the EU.

The aim of the directive is not to harmonise the level of minimum wages within the EU or set a uniform European minimum threshold, because the Union does not have jurisdiction over such matters. The aim is to establish minimum conditions for setting adequate minimum wages based on clear and stable criteria which would be updated in a regular and timely manner, as well as to ensure the inclusion of social partners. In most EU member states minimum wages are not adequate.

All 27 member states have minimum wages. In 21 of them, including Croatia, they are regulated by law, while in six countries (Austria, Cyprus, Denmark, Finland, Italy and Sweden) they are agreed through collective bargaining.

Countries with a high collective bargaining coverage tend to have a smaller share of low-wage workers and higher minimum wages than those with low collective bargaining coverage. That is why ministers agreed that countries should promote strengthening the capacity of social partners to engage in collective bargaining. If their collective bargaining coverage is below 70%, they should also establish an action plan to promote collective bargaining.

Croatia is far from 70%

Minister Aladrović said that Croatia is relatively far from the 70% threshold as its collective bargaining coverage is estimated at between 30% and 35%.

"Nevertheless, I am confident that we will attain this threshold of 70%. It is attainable, especially in the private sector. In Croatia, collective bargaining is mostly linked to the state and public sector and not the private sector, where at this point we have one expanded collective agreement," he said.

Aladrović said that Croatia would strengthen collective bargaining through the amended Labour Act, which is now under preparation.

"It includes a number of provisions aimed at strengthening collective bargaining, which is important to protect workers and make employment more certain. This is also important to employers so that they can make long-term plans," he said, adding that this would also have an indirect effect on increases in average and minimum wages.

"I am quite sure that we will attain the planned level of average and minimum wages before the time indicated in the government programme," Aladrović said.

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Thursday, 20 May 2021

Average Wage Earned in Croatia in March Totals HRK 7,138

ZAGREB, 20 May 2021 - Croatia's take-home pay in March came to HRK 7,138, rising 6.3% on the year in the nominal terms and five percent in the real terms, according to the data released by the national statistical office on Thursday (DZS).

The average wage in March rose by 1.4% in the nominal terms and o.3% in the real terms in comparison to February 2021.

The DZS says on its website that "the highest average monthly paid off net earnings per person in paid employment in legal entities for March 2021 were paid off in Information service activities and amounted to 13 237 kuna, while the lowest earnings were paid off in the activity Manufacture of wearing apparel and amounted to 4 387 kuna."

Median net earnings for March 2021 amounted to 6,000 kuna, while median gross earnings amounted to 7 728 kuna. It means that half of the people employed were paid less and the other half more than this net amount.

(€1 = HRK 7.5)

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Thursday, 30 July 2020

Croatia Has 3rd Highest Average Gross Wage in Region

ZAGREB, July 30, 2020 - The average gross wage in Croatia in 2019 was €1,182, according to Vienna Institute for International Economic Studies data, which is the third-highest gross wage in the region, after Slovenia and the Czech Republic, Raiffeisen Bank (RBA) said on Thursday.

The average gross wage in Slovenia was €1,754 and in the Czech Republic it was €1,329, followed by Poland (€1,144), Hungary (€1,131), Slovakia (€1,092), Romania (€1,038), Bulgaria (€652) and Serbia (€643).

Although Croatia is among the countries with an average gross salary above €1,000, growths in comparable countries differ significantly, RBA analysts said.

In most of the countries observed, annual growth rates since 2008 were more pronounced, while in Croatia it remained relatively stable, slightly above €1,000.

Eurostat data show that the minimum gross wage in Croatia in the first half of this year was €546. It was €575 in the Czech Republic, €580 in Slovakia, €611 in Poland and €941 in Slovenia.

In other comparable countries it was lower - €487 in Hungary, €466 in Romania, €343 in Serbia and €312 in Bulgaria.

RBA analysts say the minimum gross wage in Croatia makes up 46% of the average gross wage. It is lower in Hungary and the Czech Republic (43% each) and Romania (45%), while being higher in Bulgaria (48%), Slovakia, Serbia and Poland (53% each) and Slovenia (54%).

In Croatia, the average gross wage in 2019 was HRK 8,993, nominally up 4.4% on the year. At the end of last year, the government set the minimum net wage for this year at a gross HRK 4,062.51, HRK 312 more than for 2019.

(€1 = HRK 7.5)

Wednesday, 8 July 2020

FinMin Says Lower Taxes Don't Guarantee Higher Net Wages

ZAGREB, July 8, 2020 - Finance Minister Zdravko Maric said on Wednesday that tax cuts were not a guarantee of higher net wages but that efforts would be made to make that happen because of the idea behind tax cuts was higher wages and higher employment and investments.

Answering reporters' questions outside the government offices about the government's plans to reduce income tax rates from 36% to 30% and from 24% to 20%, Maric recalled that the HDZ party's platform envisaged certain tax changes, adding that the party stood behind that and that they would be an integral part of the government's programme as well.

He said that the government would continue with tax reliefs, but not this year since major legislative changes regarding the taxation system always took effect with the start of a calendar year.

Maric noted that lower taxes were not a guarantee that net wages would grow because that depended on employers, and in that context, he recalled that not everyone had lowered prices when the VAT rate was reduced.

"I will always do what is within my power but we cannot force anyone to do it," Maric said, adding that he expected the media to help create pressure so that lower taxes materialise as higher net wages.

He noted that around 1.8 million taxpayers, more than a half, were not subject to income tax so any change in that segment did not refer to them.

He added that the situation with the state budget was "not great" and that after four years of balanced budgets this year would see a rather large deficit, which, he noted, had been compensated for to a large extent with financing activities on the domestic and international markets.

"The situation is under control but challenges still lie ahead," said Maric, noting that the coronavirus crisis did not have to be only a problem and challenge but rather an opportunity to learn lessons and take steps that would put Croatia back on the right track, to be followed by higher growth rates.

Tuesday, 12 November 2019

Croatia Housing Costs Highest in EU Compared to Wages

As reported by IndexHR, and according to an article published on the VoxEU portal, of all EU nations Croats (in Croatia) have to work the longest to afford an apartment.

The authors of the article are Jean-Charles Bricongne, deputy director of the Banque de France, and Allesandro Turrini, head of the European Commission's Economic and Financial Affairs Department, and both are also members of CEPR (The Center for Economic Policy Research).

CEPR is a network of more than a thousand scientists and researchers from European universities and is, among other things, also the publisher of VoxEU, an influential online platform for public policy analysis and commentary by economic experts.

Real Estate Prices in 40 Countries

Bricongne and Turrini wrote an article entitled "Estimating Real Estate Prices: Insights from Price Level Data," which looks at how much home prices in 40 countries in Europe and the world relative to wages in those countries.

In other words, the article looks at how many citizens of several countries, forty of them in all, can afford to buy an apartment with the wages they earn. There is bad news for Croatia: in terms of salaries, we have the most expensive real estate of all EU member states, while in the world real estate is more expensive only for citizens of Australia, South Korea, New Zealand and Russia.


Most Expensive Apartments in the EU

"Identifying inflated residential real estate prices has become an integral part of macroeconomic surveillance," the authors indicated at the beginning of their article, adding that a detailed database of real estate prices in all countries around the world should be created so that overvalued real estate can be more effectively analyzed.

In Croatia, real estate is most definitely overvalued, given the fact that according to 2016 data, which is based upon the survey of the two economists, the average Croatian needs to work about 15 years to afford a 100 square meter apartment. The apartment price-to-income ratio for Russians is the worst of all surveyed nations. They will need 20 annual salaries to buy the same kind of apartment. Nevertheless, in comparison to other EU member states housing is obviously the most expensive in Croatia.

Data from 2016: Present Situation Even Worse

In contrast, an average German needs just eight years of earnings to buy a 100 square foot apartment. The most favorable real estate prices are in the United States, where about three annual salaries are required to buy 100 square meters of living space.

It must also be emphasized that the authors in their research were guided by data from 2016. In the meantime, real estate prices in Croatia have exploded, while wages have not increased at roughly the same pace. That means today's ratios are even worse for Croats, who now need MORE than 15 years of earnings to buy a 100 square foot apartment.

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Thursday, 28 March 2019

EY Croatia President Discusses Digitisation, Croatian Economic Situation

As Darko Bicak/Poslovni Dnevnik writes on the 27th of March, 2019, the president of the board of EY Croatia talks about the state of the country, the challenges and perspectives of the Croatian economy, and the need to promote successful stories, which they push forward through the Entrepreneur of the Year event.

Even though it has nominally existed for thirty years in the market economy, it's still necessary to properly promote entrepreneurship and entrepreneurs in the Republic of Croatia, and for this reason, the global consultancy company Ernst & Young (in Croatia, EYCroatia) is organising, for the fifth time in Croatia, the Entrepreneur of the Year project.

Why it's still necessary to promote entrepreneurship and what the general situation is with the prospects of the Croatian economy was discussed by Berislav Horvat, the president of the board of EY Croatia.

All analyses of the Croatian market show that the lack of workforce is the main challenge of Croatia's economic development. Do you see this as a short-term challenge that will, more or less, be resolved relatively quickly, or as a factor that will have more and more of an impact on the structure and development of the Croatian economy?

The labour shortage is definitely one of the major challenges facing the Croatian economy. The problem is no longer financing and a lack of capital, but just a lack of a workforce entirely. This problem will not be resolved that quickly and will represent a limiting factor for further business growth.

Although entrepreneurs and companies operating in Croatia mostly do have growth plans, the lack of a workforce could be a key obstacle. This applies to companies in various industries, from tourism and hospitality, construction and industrial production, to the IT sector.

Have other countries in ''New Europe'' encountered such challenges, and how did they solve them, or are Croatian specifics at play here, too?

Croatia isn't an exception here. Other European countries have been met with the same problems, where people were emigrating, but with growth and development, the demand for labour increased, so wages rose, which led to people returning. For us, the most important thing is to create a stable business environment that will enable entrepreneurs and companies to invest because that's a prerequisite for further employment.

On the side of the state, it's crucial to further reduce income tax and abolish the highest tax rate. This would increase the net salaries of employees, Croatia would become more attractive, and those who left Croatia would have a reason to return to it. I believe that wage growth in Croatia is a key factor that will affect the return of some of the people who have left.

New technologies, the so-called 4.0 industry, is increasingly affecting the global economy. Where is Croatia there?

We've noticed that in Croatia, companies are increasingly investing in digitisation. We, with a lot of companies, are working on a digital strategy to improve business or cost savings and this is definitely the direction in which companies need to develop. We hope that we'll soon be able to see the results of the announced state-level measures related to the digitisation of public administration, for example, the digitisation of the process of opening up companies.

How did 4.0 reflect on the work and client requests in consulting companies such as yours?

Clients are quite interested in what's going on abroad and how outsourcing companies are dealing with digitisation and the challenges it brings. They're looking for examples and the best practices. We adapted to the market situation by bringing an entire digital team to us last year. Now we can respond to market demands and provide a more rounded service.

In addition to advice, we can offer the implementation of complete digital solutions. This means that in addition to the tips of digitising today, we also provide a service for designing and programming web pages and other digital content. Clients are no longer just looking for advice, but a full service, which allows us to be innovative.

EY is organising the fifth EY Entrepreneur of the Year project. How has this program influenced the perception of entrepreneurship in Croatia and what benefits are there for participants, especially for the winners?

A lot has changed in these five years since we started the program. Before that, there wasn't much talk about entrepreneurship, startups and other interesting topics [we see] today. I believe that by putting out good entrepreneurial stories to the public, we've contributed to this shift in focus and helped our entrepreneurs become more socially accepted.

By participating in the program, entrepreneurs are given the opportunity to present themselves, their businesses and their successes, while the winner of each year is taken to Monaco in June to the world selection of EY Entrepreneurs of the Year. In those five days of various events, the entrepreneurs can connect and exchange experiences and gain a unique opportunity to present themselves to the whole world.

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Click here for the original article by Darko Bicak for Poslovni Dnevnik