Minimum Salary Level to Increase

The situation

Effective January 1, 2019, the minimum monthly salary for locally-hired non-highly-skilled employees in Slovakia will increase to EUR 520, up eight percent from last year.

Impact

• Affected permit types. The change only affects applicants under the Single Permit for Local Hires category. The change does not affect the Intracompany Transferee (ICT) Permit, which does not have a specific salary threshold; nor the EU Blue Card, which has a separate higher salary threshold (1.5 times the average wage in the relevant field, based on statistics from the previous year).
• Salaries typically above threshold. The impact of this change is minimal since employers typically pay Single Permit for Local Hire holders salaries that are significantly above this threshold.
• Existing employees, pending and new applications. Employers of foreign nationals currently under a Single Permit for Local Hires; those with pending applications as of January 1, 2019; and those seeking to obtain or renew a Single Permit for Local Hires after January 1, 2019 must increase the foreign national’s salary to comply with the new rule, if required.

Reminders on other requirements

• Benefits and allowances. As before, benefits and allowances cannot be included in the minimum salary calculation.
• Market salary rate. As before, salaries must also meet the market salary rate for the proposed position.

Background

• Trends for Slovakia. Slovakia increased its salary threshold by 10 percent for 2018, higher than the 7.4 percent for 2017. Although this increase is higher than average (most EU countries increase their salary thresholds annually by amounts under five percent), it reflects the continued growth of the Slovak economy, low unemployment rates and scarcity of skilled staff.
• Trend in neighboring countries. Recently-increased minimum salary level percentages are typical for the region, with the Czech Republic increasing salary thresholds by 10 percent for 2018 and 11 percent for 2017; Hungary by 8.2 percent for 2018 and 15 percent for 2017; and Romania by 33 percent for 2018 and 17 percent for 2017.
• Minimum living allowance. In addition to the meeting the minimum salary level, foreign nationals must also meet Slovakia’s minimum living allowance, an amount determined annually in July that applies only to foreign workers and their sponsored dependents. For each month of stay, the foreign national must have in their bank account at least EUR 205.07, plus at least an additional EUR 143.06 for spouses or parents, and at least an additional EUR 93.61 for each child. For foreign nationals travelling with a spouse and two children, the minimum living allowance is higher than the minimum salary requirement. The minimum living allowance only increased by 0.7 percent since 2017. This system is not uncommon in Europe, with Belarus, the Czech Republic, Estonia, Latvia, Portugal and Romania all combining a minimum salary threshold with a separate income requirement based on the number of sponsored dependents.

Looking ahead

Slovakia is the fifth country after Germany, Ireland, Kazakhstan and Belgium to announce its new thresholds for 2019. Fragomen expects most European countries to announce their new thresholds in the coming weeks, with Belarus, Croatia and the Netherlands typically being among the later countries to publish new amounts. Fragomen will report relevant developments on other countries’ increases and any other increases in Slovakia as they occur.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].