[WATCH] Minimum wage increase sealed in deal with social partners

Prime Minister Robert Abela presided over the second increase in minimum wage levels sealed under a Labour administration.

Abela dubbed it a historic day in which the rise in minimum wage once again signalled his party’s socialist commitment.

“I had promised a rise in the minimum wage through our 2022 electoral manifesto... we arrive at this day in a spirit of consensus through the Low Wage Commission, which includes social partners.”

Abela said the rise in minimum wage is both deserved for workers but reflects contemporary realities, referring to industry concerns on wage increases.

“The pandemic had shown us what a period of enormous challenges entailed, during which so many important decisions had to be taken... back then, an unprecedented social pact was reached for the State to finance so much of the national wage bill. Today we are pushing those workers who need it the most, the necessary income rise that enables these workers to move forward,” Abela said.

The prime minster said his administration will announce more initiatives for low-income workers in Monday’s Budget, as well as new opportunities within the digital sector.

The minimum wage is set to increase from the current €192.73 to €213.54 a week by January. Workers will also see their minimum wage for a 40-hour work week rise incrementally over four years.

The rise for next year is made up of an €8 increase plus the €12.81 cost of living adjustment (COLA), which is calculated each year. 

The minimum wage for workers over 18 will rise to €200.73 in 2024, then €203.73 in 2025, €206.73 in 2026, and €210.73 in 2027. The hourly rate will rise from €4.82 to €5.34 next year.

The Malta Chamber still expressed reservations by saying that raising the minimum wage and cost of living adjustments cannot be expected to tackle poverty alone.

The Low Wage Commission was set up in March to propose how to increase the minimum wage.

In 2017, the government had introduced incremental increases to the minimum wage that saw workers who remained with the same employer for one year get a €3 rise in pay and in 2018 those who had been with the same employer for two years got another €3 increase.

Under the new adjustments, this €6 bump will no longer be added, but they will instead receive the new agreed sum of €200.73.

Around 6,000 full-time employees will be affected by the rise, according to the 2022 Labour Force survey. Of these, some 2,000 currently receive the basic minimum wage, while another 4,000 are entitled to the benefit paid for remaining with the same employer.

The increase of the hourly rate to €5.34 will also impact thousands of part-time workers, including those who work a part-time job on top of their full-time employment.