On Tuesday, 16 November, Latvia’s parliament passed in the final reading amendments to Law on Remuneration of Officials and Employees of State and Local Government Authorities, which allow for an increase of wages for people employed in state administration from 2023 onward.
This means people employed in state administration and the next Cabinet of Ministers, not the current one, will receive higher wages.
Estimates from LETA regarding the government’s initial law amendments indicate that from 2023 onward the wage of the state president, Saeima speaker, prime minister, Supreme Court chairman and chairman of the Constitutional Court will reach EUR 7 607. This also means the wage of the prime minister and Saeima chairman will increase 40%.
The wage of ministers will increase by one-third and will reach about EUR 6 700.
The wage of the prosecutor general will reach about EUR 7 280. The wage of the state auditor and ombudsman will reach about EUR 6 700 and the wage of the vice-chairman of the Constitutional Court will be about EUR 6 500.
The wage of Saeima deputies who do not have any additional posts will reach about EUR 3 800 in 2023, which is 10% more than what deputies are paid now.
The goal of amendments to the aforementioned law is increasing efficiency and quality of work done by the state administration through a reformation of the remuneration system, as LETA was told by the State Chancellery.
It was concluded that the wage paid to people employed in state administration is up to 28-38% below the wages paid in the private sector for posts of similar level.
This way the state administration suffers from high employee turnover and it is harder and harder to attract new specialists.
Previously the state chancellery revealed that up to one-third of people hired by different state administration institutions require additional training, creating undue stress.
The complexity of tasks and low wage are the two most often reasons why people decide to leave the state administration.
«The work done by executive power, ability to execute orders from the government and the parliament is directly related to the professionalism and qualifications of the people employed in the public sector. The state administration is no longer able to compete with the labour market when it comes to attracting experts, industry professionals and senior managers,» as the director of the State Chancellery Jānis Citskovskis previously said.
He said for the first time in eleven years amendments to the aforementioned law will reform the existing remuneration system in state administration and resolve certain lasting problems – low employee motivation, high employee turnover and the need to invest considerable resources toward training.
To prevents these problems, the government made certain solutions that will help improve the competitiveness of pay in state administration by setting the monthly wage level to 80% of the private sector remuneration level. Additionally, by changing the standing and fluctuating part of pay and reducing the number of bonuses, it will be possible to reduce the total size of bonus pay employees will be able to receive – 60% to 30% of monthly wage.
This is expected to promote stability of pay and reduce the internal administrative burden with the complicated bonus pay system.
Additionally amendments also introduce other modern wage solutions – three-level wage scale, the linking of pay to economic development, introduction of a market coefficient for specialists in demand.
The State Chancellery reveals these solutions are intended to make the pay meet the level of responsibilities and complexity of employees’ duties. It should be said that the wage system’s reformation is part of the State Administration Reform Plan 2020, which is intended to help manage ministries and institutions more effectively, reduce bureaucracy, optimize the number of employees, attract qualified employees and pay appropriate wages. The problem is similar for municipalities, especially in the context of the administrative territorial reform.
Considering the problematic situation, implementation of complex solutions in the Remuneration Law will happen gradually.
In 2023 it is planned to develop an optimal wage budget outlook and prepare a budget request so that it is possible to outline in the 2024 budget project the guidelines for reduction of inequality of wages in state administration.
«Every law needs to be ‘alive’ – must keep up with the times and processes in society. […] We will monitor the adoption process of amendments and add adjustments, as well as follow the changes on the labour market and state administration. Making the next steps, we will look at facts and data, perform annual wage comparison, monitor wage level changes in state administration and results of other reforms to see if we are any closer to our goal – improve the efficiency and quality of work done by the government and government institutions,» stresses Citskovskis.
The annotation to the law mentions that the indicative financing needed to implement changes to the law is EUR 6.444 million in 2023 and EUR 6.852 million in 2024.
Previously Latvia’s Prime Minister Krišjānis Kariņš told journalists after a government meeting that the point of amendments is increasing competition and competitiveness in state administration.
People employed in public administration in Latvia to receive higher wages next year
