Minimum wage and minimum wage
In order to protect the interests of every employed person, the law establishes a minimum wage. Each employer is obliged to guarantee its employees the receipt of the established amount, but only if they work a full month. If work is performed in smaller volumes, the amount of official profit is reduced proportionally.
In 2021, the following indicators are taken as a basis:
- working out working hours for the month in full (minimum 40 hours per week, but a different duration may be established by the staffing table);
- compliance with standards (for example, manufacturing 5,000 parts per month at a factory).
The minimum wage is a state value, that is, a set amount of wages valid throughout the Russian Federation. The requirement applies equally to all sectors of employment, to public and private companies. But regional authorities are vested with the right to establish the minimum wage in force in the territory of a particular subject of the Federation.
The minimum wage in the region cannot be lower than the minimum wage.
Another feature of regional regulation of the salary of an employed person is that employers sign an agreement with the municipality on the use of the minimum wage amount. Signing an agreement is voluntary, so not all companies act on the basis of the minimum wage. Moreover, a party to the agreement can be not only a legal entity or individual entrepreneur, but also company trade unions that protect the interests of workers.
In 2021, the minimum wage in Russia is 11,280 rubles.
For violation of legislation in the field of remuneration of officially employed citizens, legal entities are held accountable within the framework of administrative and civil legislation.
What is included in the minimum wage in 2021: what additional payments and allowances are
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 2021, 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.
Components of the minimum wage
Article 129 of the Labor Code determines what types of payments will be included in a person’s salary.
Table “Types of deductions”
| Salary | Incentive payments | Compensation |
| The salary depends on the type of work activity. The amount is fixed in the staffing table and will be the same for all employees of a particular position. | Material incentives provided for certain types of achievements. For example, exceeding production plans. The following types of cash payments fall into this category:
The law does not provide for a unified list of such incentives, therefore, depending on the specifics of production, the employer can independently regulate the list and procedure for providing material incentives to employees. The main condition is fairness, that is, receiving incentives should be available to all officially employed persons. | This category includes regular compensation provided to a person for performing work under special conditions. Example:
Compensation is provided individually, depending on the person’s functional responsibilities. |
The law establishes that the minimum wage includes salary, regular compensation and material incentives. This amount will not include one-time compensation related, for example, to payment for business trips, compensation for the cost of office supplies or fuel/taxi required to travel to the place of work.
What the law says
An employee who has fulfilled the full scope of his duties for the required working hours per month should not receive payment for work less than the minimum level established in the state. But what does the minimum wage consist of? Is the bonus included in the minimum wage in 2021? The basis of the minimum level of payment is salary with possible bonuses and additional payments “for hazardous production”. In each case, the fact of whether the minimum wage can eat up the bonus or whether it is accrued above it depends on the frequency of bonus payments. Their frequency is determined in the regulatory documents of the organization (under Article 135 of the Labor Code of the Russian Federation):
- employment contract;
- collective agreement;
- regulations on bonuses for employees, etc.
Payment of one-time and periodic incentives occurs on the basis of an order signed by the head of the organization.
Features of calculating the minimum wage
Despite the strict definition of what elements the minimum wage consists of, in practice a number of features related to the calculation of official profit for a working person must be taken into account.
Bonuses
The Labor Code leaves employers the opportunity to independently regulate the procedure for providing wages, taking into account the mandatory requirements:
- monthly income cannot be lower than the minimum wage;
- Money is paid at least twice a month.
As for bonuses, these are additional allowances that can be one-time or periodic (monthly, quarterly, annual, holidays). Regardless of what type of bonus is awarded to the employee, it is included in the amount of the minimum wage.
Example:
The workers received a one-time bonus on New Year's Eve. The goal is to thank employees for an effective working year. The bonus amount was 7,000 rubles and was taken into account in the amount of the minimum wage.
Nights, weekends, holidays
According to the requirements of labor legislation, if an employee is involved in official work on weekends and holidays, as well as when working night shifts, the person’s activities must be paid additionally. This is a regular compensation payment associated with the lack of normal rest.
The resolution of the Plenum of the Supreme Court of the Russian Federation established that such compensation payments should be included in the amount of the minimum wage, but their provision should be universal and fair for all participants in the labor relations of a particular enterprise.
Harmfulness
When applying for a job, a person must be warned that work activity will be associated with harmful conditions. Also, the parties to the contract must stipulate the amount of wages accrued for such work. In addition to the salary, the amount of the bonus is negotiated, which is also included in the minimum wage (fixed 11,280 rubles).
Overtime work
Judicial practice shows that courts in different regions make different decisions on such issues. Thus, there is a practice when overtime hours were included in the minimum wage, since this time relates to the officially worked period. A person is at work, performing his labor functions.
On the other hand, there are precedents when overtime work was not included in the minimum wage. The court reasons its decision by saying that a person’s working day has long been completed and he deserves a good rest, but is forced to work, so such an additional payment should be an incentive that exceeds the minimum wage.
Regional coefficient
The introduction of the regional coefficient is due to the special climatic conditions that workers in a particular region have to face. Also, an increasing coefficient may be introduced due to a particularly high pricing policy in the territory of a subject of the Federation.
In order to eliminate contradictions and disputes, the Constitutional Court of Russia provided clarifications regarding the regional coefficient and the minimum wage. Thus, it was decided not to include increasing factors in the minimum wage. That is, the minimum wage is calculated first, and then a fixed bonus is added. This is due to the fact that work in special climatic conditions is associated with constant harmful or dangerous working conditions. Therefore, such employees should receive more income than workers in similar areas in other regions.
This rule was approved by Resolution of the Constitutional Court of Russia No. 38 of December 7, 2021. The law does not have retroactive force, therefore employees for whom the regional coefficient was previously included in the minimum wage amount cannot claim an increase in payments. But from December 7, 2017, violation of the established requirements will be the basis for the employer’s legal liability.
Quarterly and annual bonuses
Payments of periodic quarterly remuneration return to the question of whether a one-time bonus is included in the minimum wage or not. This remuneration is accrued once every three months, while the minimum wage must be paid to the employee every month. It is prohibited to distribute quarterly payments over several months, thus leveling the level of earnings.
The same applies to annual bonuses. It is not possible to compensate 11 months' salary up to the minimum level through a one-time bonus payment.
Responsibility of enterprises
Each participant in labor relations is obliged to fully comply with the established requirements of the law. Violation of working conditions and remuneration entails legal liability. You can hold a company accountable in the following ways:
- filing a complaint with the labor dispute commission;
- filing a complaint through the organization's trade union;
- sending a statement of claim to the court.
To protect interests, it is necessary to collect a complete package of documents confirming the violation on the part of the company.
In addition, companies are regularly inspected to identify violations of labor laws. If it is discovered that some employees receive profits below the minimum wage, the legal entity is held accountable. In 2021, the following types of sanctions apply:
- 30 – 50 thousand rubles fine for a single violation;
- 50 - 70 thousand rubles fine for repeated bringing to administrative responsibility.
In order to avoid liability, the employer must also take into account the fact that if, after calculating all salaries, allowances and compensations, the amount of wages does not reach 11,280 rubles, an amount is added to the current figure until the amount of payments reaches 11,280 rubles. If an agreement is signed with regional authorities, the minimum wage (MW) will have to be followed.
Additional payment on the occasion of a holiday
When deciding whether a holiday bonus is included in the minimum wage, you should remember that it is legal to include in it only the bonus paid for the current month, without transferring it to other periods. Therefore, if incentive bonuses for the occasion are not planned in the statutory documents for each calendar month, then they are not counted towards the minimum salary level.
Let us summarize how the additional payment to the minimum wage and the bonus relate to the accounting department of an enterprise. If the regulatory documents state that a bonus for work performed is paid monthly, only in this case is it or part of it used to achieve the required minimum salary. A one-time bonus is not taken into account in the minimum wage.
