Govt softens sanctions against companies failing to top up wages

Budapest, June 23 (MTI) – The government has softened a plan to sanction companies that fail to top up the wages of earners whose pay fell due to income tax changes enforced earlier this year, tabloid Blikk reported on Thursday.  

Antal Rogan, the Fidesz lawmaker who drafted the government’s compensation scheme, told the paper there would be no “wage commando” set up to enforce fines, but insisted that the government would find other ways to pressure companies into raising gross salaries below a monthly 300,000 forints (EUR 1,125), the rough watermark below which wages drop.


Instead companies that fail to compensate their employees face being excluded form state procurements and EU funding competitions for two years. He added that employers would not be forced to raise wages for every employee but rather for two-thirds of the target group, which means incentives for good performance can be applied.


Ferenc David, general secretary of the association of entrepreneurs and employers (VMOSZ), said the measure would be counterproductive.


“It creates bad blood at work when two-thirds of staff get a raise as a result of government pressure, while the rest don’t,” he told the paper.


He added that those companies that have not so far topped up salaries are not likely to do so in the future, either, as in all probability they would not be hurt by state sanctions.


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