Jonas Hamers / ImageGlobe

Federal Inner Cabinet reaches agreement on wages

The Federal Inner Cabinet has reached an agreement to end the impasse in the negotiations between employers and the unions on wage increases. Under the agreement companies that are profitable will be able to give their employees a so-called “consumption cheque”, a tax-free gift voucher, worth up to 500 euro. Companies that have made very big profits will be able to offer their employees a consumption cheque worth up to 750 euro. Meanwhile, unemployment benefit will rise less quickly that had been originally planned. The money that had been earmarked for this will go to help raise the take-home pay of those on the minimum wage. 

After talks between the employers’ federations and the unions on eventual wage increases broke down at the start of the month, it was left to the Federal Inner Cabinet to try and find a deal that would strike the correct balance between employees’ purchasing power and the competitiveness of the country’s businesses. Almost a month later Ministers have reached agreement on a series of proposals that they believe strike the correct balance.

Companies that are profitable will be able to offer their staff a consumption cheque worth up to 500 euro. Firms that have made big profits will be able to offer their employees consumption cheques worth up to 750 euro. Companies that have not made any profits or are running at a loss will not be able to offer any consumption cheque at all. It will be up to the unions in the individual sectors of the economy to decide the value of the consumption cheque that will be paid out in their respective sectors.

Unemployment benefit

The Federal Government has also decided to increase the level of unemployment benefit less sharply that had originally been planned. Unemployment benefit will increase by a maximum 1.3% above the rate of inflation rather than originally planned maximum of 3.5%. The money saved will go towards improving the take home pay of those on the minimum wage.

Top stories