The Cabinet decided, on January 18, to raise the minimum salary for employees to LL675,000, following more than three months of political wrangling and three futile wage hike drafts.
The formula which the Cabinet adopted is in line with the agreement inked by representatives of the economic associations and the General Confederation of Labor Unions (GCLU) on December 21.
The Cabinet’s decision, as published in the Official Gazette, entails annulling a previous wage rectification decree (number 500) adopted in 2008, which had raised all salaries by a lump sum figure of LL200,000.
From a judicial perspective conveyed by the Shura Council, the 2008 decree had violated the laws which strictly state that any salary rectification must be calculated as percentages on different wage segments rather than as a lump-sum.
The Cabinet’s most recent wage hike draft decree stated that the salary increases will be applied starting with the salary earned for the month of February.
The wage hike draft calculates the raises after subtracting the LL200,000 raise added in 2008, thus bringing the minimum salary back to LL300,000 (as it had been before 2008). Then, an increase of one hundred percent will be applied to the first salary segment (the segment from LL300,000 to LL400,000). The formula states that the increase must not be less than LL375,000. Thus the new minimum wage would become LL675,000.
The formula also states that the second salary segment which ranges from LL400,000 to LL1.5 million will get a nine percent raise which must not exceed LL124,000.
The Cabinet decided to protract the transportation (kept at LL8,000 for each effective work day) and education allowances (raised from LL1 million to LL1.5 million per year). These two allowances will be issued in separate decrees and will not be calculated within the basic salary.