The Management Board of the Employers' Association of FBiH has issued a public statement expressing concern over the FBiH Government's recent decision to raise the minimum wage, calling it hasty and warning of serious consequences.
While supporting wage increases for workers, the Association emphasized that such measures must be both feasible and sustainable. They reiterated their previous stance that employers should increase net wages, while the government should reduce employer obligations through fiscal and other reforms, creating a balanced approach to improving workers’ conditions.
“The Economic-Social Council meeting was another missed opportunity for socioeconomic partners to engage in responsible dialogue and reach mutually acceptable solutions. Instead, this decision has taken us several steps backwards,” the statement read.
The Association highlighted unresolved business environment issues, including the lack of a finalized fiscal law package, undefined health insurance obligations for employers, parafiscal burden reduction, and misaligned social benefits. They warned that implementing the wage increase before addressing these issues places a heavy burden on employers, potentially leading to operational difficulties, job cuts, and reduced competitiveness, particularly in foreign markets, further discouraging investment in FBiH.
“Increasing the minimum wage inevitably triggers a rise in all other wages, and it’s widely known that higher wages result in additional social contributions at every level of government. The timing of this decision—at the end of the fiscal year when business plans are already finalized—makes it nearly impossible for companies to adjust for such a drastic wage increase,” the statement emphasized.
The Employers’ Association announced plans to consult with economic experts and the academic community in the coming days to assess the impact of the decision and devise strategies to preserve their businesses and retain as many employees as possible.
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