Paruch, Włodarczyk: Navigating minimum wage changes in Poland

By 15th November 2024, Poland is required to implement the EU Directive 2022/2041, which focuses on ensuring adequate minimum wages across the European Union. A higher minimum wage translates to increased labour costs for employers, which may prompt them to review their compensation structures, potentially leading to cuts in bonuses or other benefits. However, this could potentially backfire – the absence of bonuses and other benefits could demotivate employees, leading to decreased productivity, higher absenteeism, and increased employee turnover.

Employers also express concerns about pay compression. When the minimum wage rises significantly, businesses might struggle to allocate funds for raises dedicated to rewarding experienced personnel. This could lead to a scenario where senior staff with years of experience earn only slightly more than newly hired and low-skilled employees. – Sławomir Paruch and Michał Włodarczyk comment for Rzeczpospolita.

Full article in Polish avialible: here.