Five minimum wage changes to be aware of in 2021

By Mark Baggs, Head of Global

When hiring globally, there is lots to keep track of. From employment laws and regulations to taxes and payroll. Managing a global team comes with substantial HR admin. But one thing that always needs to be kept on top of is changes to the minimum wage.

We’ve explored five different countries that have made minimum wage changes in 2021.

United Kingdom

From April 2021, the national living wage will increase to help ‘support Britain’s workforce, while recognising the impact the COVID-19 pandemic has had on business.’

In full, the increases are:

  • National Living Wage (23+) to increase 2.2%, from GBP 8.72 per hour to GBP 8.91
  • National Minimum Wage (21-22) to increase 2%, from GBP 8.20 per hour to GBP 8.36
  • National Minimum Wage (18-20) to increase 1.7% from GBP 6.45 per hour to GBP 6.56
  • National Minimum Wage (under 18) to increase 1.5% from GBP 4.55 per hour to GBP 4.62
  • Apprenticeship Wage to increase 3.6% from GBP 4.15 to GBP 4.30

Portugal

As of 1st January, minimum wage levels changed to incorporate an increase of 4.7% across Portugal. This brings the total gross monthly amount to EUR 665. The new wages apply to the Temporary Stay Visa and Residence Visa for Local Hires. The change also affects current permit holders and new applicants.

This is a lower rate of increase than in 2020, which was a 35 euro increase. The reason stated for this is because of the negative inflation recorded, however it is still inline with Antonio Costa’s goal of raising the minimum wage to EUR 750 gross per month at the end of his mandate.

The graph below highlights the minimum wage increase in Europe between July 2010 and July 2020.

minimum wage changes 2021

Czech Republic

The national minimum wage increased 4.1% at the start of this year to CZK 15,200. This marks a 600 Kc rise from 2020, which is lower than last year’s increase of 1,250 Kc. The new minimum wages apply to existing employees, new and renewal applications, and pending applications.

Long-term visa applicants must each hold 15 times the minimum subsistence amount (currently CZK 2,490) for the first month of stay, and twice the minimum subsistence amount for every consecutive month of stay.

Those under 18 must only show half this amount. Long-term business visa applicants must hold 50 times the minimum subsistence amount per month, currently CZK 124,500, for the full one-year visa validity.

Ireland

From the start of January, Ireland increased its minimum wage from  EUR 10.10 per hour to EUR 10.20 per hour. The change will affect the base salary requirements for several work permission categories, including: Atypical Working Scheme permissions, Internship Employment Permits, Intra-Company Transfer (ICT) Permits, Contract for Services Permits. The full changes include:

  • Aged under 18:  EUR 7.14 per hour (70%)
  • Aged 18: EUR 8.16 per hour  (80%)
  • Aged 19:  EUR 9.18 per hour (90%)
  • Aged 20 or more: EUR 10.20 per hour

Germany

From the start of this year, Germany’s minimum wage has increased from EUR 9.35 to EUR 9.50 euros per hour. This is part of the stepped plan to increase the minimum wage to EUR 10.45 per hour by 2022. Three further increases will follow.

The steps of wage increase in Germany include:

  • As of 1 January 2021: EUR 9.50
  • As of 1 July 2021: EUR 9.60
  • As of 1 January 2022: EUR 9.82
  • As of 1 July 2022: EUR 10.45

Luxemburg

As of the start of 2021 in Luxemburg, for non-graduate workers, including Work Permit for Salaries Workers applicants, the new minimum wage is EUR 2,201.93 gross per month. The minimum wage for qualified workers is now EUR 2,642.32 gross per month.

The minimum wage increase also applies to EU/EEA and Swiss nationals, along with EU Intracompany Transferee (ICT) Permit applicants and graduate applicants for a Work Permit for Salaried Workers. A separate threshold applies to EU Blue Card applicants. 

Managing a global workforce

Managing a global workforce comes with many challenges. If you need assistance navigating minimum wage changes, or would like more information about how a PEO can help facilitate and manage a global workforce, speak to one of our experts today.

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