What is included in the minimum wage, why is it necessary, and how is the additional payment up to the minimum wage calculated?

Minimum wage size in 2021

A project to change the methodology for calculating the minimum wage has been submitted to the State Duma.
The current version provides that from January 1 of the corresponding year the minimum wage is set no lower than the subsistence level of the working population in the country as a whole for the second quarter of the previous year. This system has existed for the last two years - since January 1, 2021. Based on this calculation logic, then for 2021 the minimum wage should be 12,392 rubles . And this is confirmed by Order of the Ministry of Labor dated August 28, 2020 No. 542n.

However, the draft law, which is currently being considered in the first reading, proposes a higher minimum wage in 2021 - 12,792 rubles. Apparently, the initiative is related to the consequences of the prolonged pandemic.

New methodology for calculating the minimum wage

The proposal is that the minimum wage should now depend on the median salary for the previous year.

The bill clarifies that starting from 2021, the ratio of the minimum wage to the median salary will be set at 42%. This ratio will be reviewed at least once every 5 years, taking into account socio-economic circumstances.

At the same time, the minimum wage cannot be lower than the subsistence level of the working population as a whole for the next year.

What is median per capita income

By this concept we should mean the amount of money income, relative to which half of the population has an average per capita income below this value, the other half - above this value.

The median per capita income is calculated taking into account the collected statistical information.

What is included in the minimum wage

Based on the above legal acts, the minimum wage includes:

• An official salary or other remuneration for work based on the employee’s skill level.
• Compensatory payments (in particular, additional payment to the minimum wage level for employees whose salaries are lower, as well as a regional coefficient in territories where they are in no hurry to implement the decision of the Constitutional Court of the Russian Federation, given above).
• Premium payments.

Salary below the minimum wage: responsibility and fines

Why is the minimum wage important? For many reasons. First of all, wages depend on it. The employer does not have the right to pay full-time employees a salary below the minimum wage, as stated in Art. 133 of the Labor Code of the Russian Federation: “The monthly salary of an employee who has fully worked the standard working hours during this period and fulfilled labor standards (job duties) cannot be lower than the minimum wage.”

Rostrud on its official website clarifies that wages may be less than the minimum wage if the employee works part-time or part-time. “The salary may be less than the minimum wage. In addition to salary, wages include compensation payments, various bonuses and incentive payments (Article 129 of the Labor Code of the Russian Federation). Thus, taking into account all salary increases or incentives, the employee receives an amount greater than or equal to the minimum wage. If the employee’s salary is still less than the established minimum wage, the employer must make an additional payment up to the minimum wage.”

Conducting business according to the law. Services for individual entrepreneurs and LLCs less than 3 months old

Details

The employer must understand that he is at great risk if his employees receive wages below the minimum wage. The labor inspectorate may fine him. According to Part 6 of Art. 5.27 of the Code of Administrative Offenses of the Russian Federation, such a violation entails a warning or the imposition of an administrative fine on officials in the amount of 10,000 to 20,000 rubles; for legal entities - from 30,000 to 50,000 rubles.

For repeated violations, the fine for officials ranges from 20,000 to 30,000 rubles. or disqualification for a period of one to three years; for legal entities - from 50,000 to 100,000 rubles.

Salary is less than the minimum wage for a part-time worker

Rostrud experts draw attention to the fact that in case of part-time work, remuneration should not be lower than the minimum wage, calculated in proportion to the time worked - depending on output or on other conditions determined by the employment contract (Article 285 of the Labor Code of the Russian Federation).

Thus, the wages of a part-time worker should not be lower than the minimum wage, calculated in proportion to the time worked.

Why and who needs a minimum wage?

First of all, the minimum wage is used to regulate labor relations. Employers of any form of ownership do not have the right to pay wages below the minimum level established by law. Exceptions are specifically stated in the law; they will be discussed below.

In addition, social benefits (maternity benefits, sick leave), and in some cases unemployment benefits are calculated based on the minimum wage.

The size of the minimum wage in the Russian Federation has not only economic, but also political significance. Some political forces have long called for an increase in the minimum wage to a living wage. Others argued that such actions would fuel inflation by causing wage increases that were not matched by increases in labor productivity and, as a consequence, higher prices. As a result, the principle of political expediency prevailed: against the background of a series of election campaigns over 2 years, the amount of the minimum wage increased by more than 80%. A mitigating circumstance was the record low level of inflation in the country.

In total, according to the Ministry of Finance of the Russian Federation, an increase in the minimum wage directly affects payments to approximately four million working residents of the country. Another 12 million have salaries and benefits tied to the minimum wage.

Regional minimum wage

According to Art. 133.1 of the Labor Code of the Russian Federation, in addition to the federal minimum wage, which is valid throughout Russia, regions can set their own minimum wage. It is determined taking into account socio-economic conditions and the cost of living of the working population in the corresponding subject of the Russian Federation.

By law, the minimum wage in a constituent entity of the Russian Federation cannot be lower than the minimum wage established by federal law. At the same time, regional authorities have the right to equate the minimum wage to the federal standard or increase it.

Employers have a period of 30 days during which they can send to the labor body a written refusal to join the regional agreement on the minimum minimum wage in a specific subject. Silence automatically means consent, that is, if they do not refuse, they join the agreement.

The minimum wage in the constituent entities of the Russian Federation: table

Minimum wage in Moscow for 2021

The minimum wage in Moscow is 20,195 rubles. established by Decree of the Moscow Government dated September 10, 2019 No. 1177-PP and is already in force from October 1, 2021.

Minimum wage in the Leningrad region from January 1, 2021

On November 28, 2021, a Regional Agreement on the minimum wage was concluded in the Leningrad Region for 2021, according to which the minimum wage here is set at 12,800 rubles.

It follows from this that the monthly salary of a person working in the Leningrad region and in an employment relationship with an employer subject to a regional agreement cannot be lower than the minimum wage in the Leningrad region if this person has fully worked the standard working hours during this period and fulfilled labor standards.

In connection with the increase in the minimum wage, the question often arises about salary indexation - is it mandatory? We previously wrote about this in the article “Wage Indexation: An Employer’s Right or Obligation?”

Minimum wage: what is it?

The abbreviation MROT stands for minimum wage. This is the lower threshold of the amount that an employer is required to pay an employee for a full month worked. This indicator is approved by law and is mandatory for all employers, regardless of the form of ownership of the organization. Failure to fulfill the employer's obligation to set a salary not lower than the minimum wage entails administrative liability.

For almost the entire post-Soviet history, Russia was characterized by a significant lag between the minimum wage and the subsistence level, and only since 2016 the situation began to change. From May 1, 2018, the minimum wage is equal to the average subsistence level in the country.

Changes in the federal minimum wage in the Russian Federation over the past 10 years

Data are presented in reverse order.

Watch a foreign video, designed in a cartoon format with Russian subtitles, which clearly reveals the essence of the concept of minimum wage (minimum wage) and how it affects unemployment:

Video: How the minimum wage creates unemployment

Minimum wage when setting wages for LLC branch employees

There are often situations when an LLC is registered in one subject of the Russian Federation, and its employees work in a branch of the LLC in another subject. In this case, what minimum wage should we be guided by when setting salaries for branch employees?

In this case, it is legal to set the salary taking into account the minimum wage established in the subject where the LLC branch is located.

Calculate your salary and benefits taking into account the increase in the minimum wage from 2021

As stated above, in the regions the minimum wage can be established by regional agreement. In accordance with Part 2 of Art. 133.1. The Labor Code of the Russian Federation, the minimum wage in a constituent entity of the Russian Federation can be established for employees operating in the territory of the corresponding constituent entity of the Russian Federation, with the exception of employees of organizations financed from the federal budget.

Who sets the minimum wage

The minimum wage according to Russian legislation is established both at the level of the entire country and for each region. Moreover, the regional minimum wage cannot be less than the federal one.

The all-Russian level is proposed by the government of the Russian Federation, adopted in the form of a law by the State Duma, approved by the Federation Council and signed by the president. The regional size of the minimum wage is established by an agreement concluded for 3 years between the government of the region, territory or republic, the regional association of trade unions and the regional association of industrialists and entrepreneurs.

FAQ

The minimum wage has been legally increased to the subsistence level. But the latter is set every quarter and often downwards. Does this mean that the minimum wage may be higher than the subsistence level?

On May 1, the legislator introduced a flexible system for determining the minimum wage. Federal Law No. 41-FZ of March 7, 2018 established the minimum wage at 11,163 rubles. This minimum wage will be in effect until January 1, 2021, after which Article 3 of Federal Law No. 421-FZ of December 28, 2017 will come into force. It states: the minimum wage is set once a year from January 1 at the level of the subsistence level for the second quarter of the previous year. Moreover, the current level of the minimum wage cannot be reduced: if it turns out that the cost of living has fallen, the minimum wage will still be 11,163 rubles. So, in theory, the minimum wage may be higher than the subsistence level.

I am an employer, I opened a branch in a region where the local minimum wage is higher than the federal one. Established by tripartite agreement. If I refuse to join this agreement, can I calculate the salaries of branch employees based on the federal minimum wage?

Formally, the employer has the right to refuse to join the agreement on the regional minimum wage. To do this, he must, within a month from the date of publication of the agreement or opening of the enterprise, send an official refusal to the commission that concluded the agreement. The document must be motivated. In your case, this may be the start of a business; difficult economic circumstances are also taken into account: a fall in the stock market, the bankruptcy of the bank in which your funds were located, a refusal of a loan, emergencies, etc. Each argument must be supported by documentation: an extract from the balance sheet, a report from the insurance company, and so on. But even in this case, the chances of a positive solution to your question are almost zero. At least in the Russian Federation, there are no precedents when companies were allowed to apply the federal minimum wage in regions where a higher regional one applies.

Over the past 2 years, the minimum wage has been increased 4 times. From what minimum wage are sick pay calculated (when calculating them, a period of 2 years is taken) - from the current one, or are all 4 amounts taken into account, broken down by the periods in which they were valid?

All benefits (for temporary disability, for pregnancy and childbirth, for child care up to 1.5 years) are calculated only on the basis of the minimum wage in force at the time of calculation.

❗ What and how does the indicator affect

The minimum wage affects salaries, benefits and allowances in Russia, and is also in rare cases used when calculating sick leave.

Salaries

As already mentioned, with full-time employment, the employer does not have the right to pay an employee below the minimum wage, except when the person works part-time or part-time.

In some regions, regional coefficients apply, or employees by position are entitled to various allowances. Some cunning employers try to deceive employees by claiming that bonuses are included in the minimum wage along with the salary. This is not so - the salary with bonuses and regional coefficients should be higher than the minimum wage.

Also, the minimum wage does not include additional payments for work on weekends and overtime - these are overtime payments that are paid in excess.

It is important that the minimum wage refers to wages before taxes . If, after all tax deductions, the employee receives an amount less than the established minimum, this will not constitute a violation.

Benefits and sick leave

Sick leave is paid based on salary. But in some cases, the minimum wage is used for calculation:

• if the average daily earnings are below the minimum wage (for example, with a part-time job);
• if the employee violated the hospital regime (for example, he was hospitalized, but he refused treatment and went home);
• if the employee worked for less than 6 months (it is technically impossible to calculate the average salary for six months);
• if an employee missed a mandatory medical examination without a good reason and immediately after that took sick leave.

The situation is the same with benefits. According to standard schemes, all benefits, including maternity benefits, are calculated according to the official salary. The minimum wage is used:

• if the person has not officially worked for the last 2 years;
• if the average salary was less than the minimum wage (again, for example, with part-time employment).

What rights do you have while on sick leave? Memo

Read

What to do if your salary was illegally reduced

More details

Place of work and workplace. Why aren't they the same thing?

Look

Minimum regional salary

The constituent entities of the Russian Federation draw up a regional agreement, involving trade unions and other interested organizations. After its publication, commercial employers are given time to join or refuse to accept the agreement. In this case, the principle of the saying “silence is a sign of consent” works.

Important! The refusal period is within 30 calendar days from the date of publication of the invitation to join.

How not to accept an agreement? You will need to draw up a justified refusal and, possibly, appear at a commission where the salary level will be discussed. If the organization has a trade union or other body that works to protect the rights of workers, then it must be invited to the conversation.

The authorities do not welcome the organization’s reluctance to join the regional agreement, and the company will not be able to pay less than the federal minimum wage in any case, so the justification must be truly realistic: a difficult financial situation, a reduction in wages in order to preserve jobs. It is worth presenting a business plan or program for overcoming a crisis situation.

Important! When an organization or an entrepreneur has employees working part-time, but the salary or payment at a full-time rate is not lower than the minimum wage, then the conditions are met, and there is no need to refuse the agreement.

Another option is that the organization has just opened, there are no or few employees, and these are the owners or persons associated with them; for the period of development, the salary in the form of the minimum wage suits them. It is unlikely that they will find fault with a “family” business, but when the company begins to hire new employees who have no relation to the owners, it is better to change the conditions.

A significant difference between the federal and regional minimums is that in the subject and even its individual parts (cities) regional coefficients and allowances may apply, and they affect the amount of wages received.

Coefficients and premiums

We are, of course, talking about regional coefficients and allowances when working in the Far North and similar areas. The current list can be found in Resolution No. 12 (it was approved back in Soviet times and was updated several times).

Initially, it was believed that the minimum wage includes all basic payments and bonuses (Article 129 of the Labor Code of the Russian Federation). In many subjects, the agreement even indicated that the “northern” coefficients were taken into account in the established minimum wage, and Labor inspectorates and courts took a different position and recognized the right of workers to receive the minimum wage + bonuses for work in the Far North and equivalent areas.

The practice was ambiguous: on the one hand, the courts sided with the citizens, on the other, due to the unclear wording of the legislation, the employer and regional authorities did not violate anything.

In 2021, the Constitutional Court recognized that the minimum wage is payment guaranteed to any employee, regardless of the location; in particular, Article 133 of the Labor Code of the Russian Federation determines the size of the minimum wage throughout the Russian Federation. This means that the minimum wage and minimum wage do not include payments due in special climatic areas. Simply put, coefficients and bonuses need to be calculated from above.

This position was supported in 2018 by the Presidium of the Supreme Court in Resolution No. 4ПВ17. Therefore, the above allowances must be added to the minimum established by the regional agreement. In this case, the regional coefficient is established for a certain territory and applies to all employees, but the northern bonus depends on length of service.

Minimum wage and living wage

Article 133 of the Labor Code of the Russian Federation directly states: the minimum wage should not be lower than the subsistence level. Since the beginning of the 90s, this standard has not been met due to a lack of budgetary funds (most of the positions that are paid below the minimum are in the public sector). Since 2021, the gap between the minimum wage and the living wage has begun to narrow. And on both sides: in many regions, decisions were made to reduce the cost of living.

In order to avoid such manipulations and due to the low level of inflation, as well as for the political reasons that have already been mentioned, a decision was made from May 1, 2021 to set the minimum wage at the level of the average subsistence level in the country. However, in reality, due to the collection of personal income tax, the income of an employee receiving the minimum wage will still be below the subsistence level.

Minimum wage and benefits

“Maternity” benefits are calculated based on the minimum wage in several cases:

• If the employee has not worked within the last 2 years
• If the employee’s average salary was lower than the current minimum wage
• If the employee's length of service is less than six months

Child care benefits up to 1.5 years old cannot be lower than the minimum wage.

Unemployment benefits depend on the minimum wage when the unemployed person has minor children or other persons with limited legal capacity as dependents. In this case, the benefit amount increases by ½ minimum wage for each dependent.

The maximum unemployment benefit cannot exceed the “minimum wage” by more than 1.5 times.