The minimum wage is set to increase from the current €192.73 to €213.54 a week by January, the government has announced.

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. 

In a briefing on Thursday, journalists were told the minimum wage for workers over 18 will rise to:

• 2024: €200.73 + COLA 
• 2025: €203.73 + COLA for 2024, and 2025
• 2026: €206.73 + COLA for 2024, 2025 and 2026
• 2027: €210.73 + COLA for 2024, 2025, 2026 and 2027

The hourly rate will rise from €4.82 to €5.34 next year.

The minimum wage is being increased after an agreement was reached between the social partners.

However, the Malta Chamber still expressed reservations and said that raising the minimum wage and cost of living adjustments cannot be expected to tackle poverty alone.

A Low Wage Commission had been set up in March to propose how to increase the minimum wage.

6,000 full-time workers affected

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 euro bump 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.

Deputy chair of the commission Mark Musu said that these adjustments will impact some 6,000 full-time employees, 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, he said.

Parliamentary Secretary Andy Ellul said that the setting up of the Low Wage Commission earlier this year came later than expected.

The government had intended to do so by 2020, however the COVID-19 pandemic had “wreaked havoc” on employment in the country and priorities were forced to shift.

However, Ellul said that he was pleased that the commission had come to an agreement quicker than anticipated, with the Commission originally given until the end of this year to come to an agreement on raising the minimum wage.

'Historic moment'

But it was no easy ride, he said, with several concerns raised from both employers and unions on what impact it would have.

“I am glad to say that we reached this agreement across the board, there was no red or blue, everyone understood that all workers stand to benefit from this,” he said.

“This is a historic moment for industrial relations because to get here it took an effort from all sectors.”

Ellul described it as a “win-win" for both workers and employers who will "see a new level of productivity.”

Commission chair David Xuereb said that dialogue with stakeholders was key to implementing these changes successfully and was not simply a matter of the government imposing on businesses.

“I think our biggest success is that everyone involved in this process was willing not only to speak but to listen to what others have to say, we should be proud of what we achieved,” he said.

“We sought to dialogue not only with social partners but other groups who have an interest in having a say in the matter. It shows that we have a civil society that is capable of being reasonable and acting maturely and responsibly on matters of national interest.”

In comments to Times of Malta, Ruben Cuschieri, who is part of the Malta Chamber’s council and sat on the Low Wage Commission, said that the Chamber has been consistent in highlighting the risks of persistent inflation. 

Spiralling wage costs that aren’t matched by productivity increases will impinge negatively on Malta’s competitiveness internationally, he said and in turn, impact the same people at whom these initiatives are targeted. 

“The Malta Chamber has been unequivocal that increases in the minimum wage or COLA alone, the burden of which falls exclusively on employers, cannot be expected to address poverty alone,” he said. 

“This must be accompanied by measures by the Government to curb inflation and improve productivity, particularly within the public sector where the incentive to do so is less pronounced.”

Cuschieri added that it would be also pertinent for the Government to make sure that workers who benefit from these wage increases should do so without tax deductions, by adjusting tax bands accordingly.