Improvement of public administration remuneration system

 In order to promote the competitiveness of the state administration, the State Chancellery has drafted amendments to the Law on Remuneration of Officials and Employees of State and Municipal Institutions, which was announced on Thursday, January 4th, at the State Secretaries' meeting .

The draft law provides for a number of amendments to ensure that public administration employs highly skilled, motivated employees in order to successfully pursue public administration reforms aimed at moving towards a small, professional, citizen-centered public administration. 

Taking into account the latest trends in the labor market, the average wage in the private sector increases year by year: last year the average monthly wage increased by 6.3%, the highest wage increase since 2008. A further increase in wages is projected in the coming years. Similarly, each year the number of employees who leave the public administration is increasing (18.5% or 593 people were interrupted by the ministries in 2016; in October 2017, 16-18% of employees stopped working at separate ministries).

The salaries of employees in public administration are highest at the time, the average, the lower level and the highly qualified experts (the 10th - 16th month of the salary group) are significantly lower than similar positions in the private sector, reaching only 37% of the private sector's average monthly salary, the study suggests. The above points to the persistent public sector competition with the private sector for industry professionals. 

Therefore, with amendments to the law, it is planned to increase the maximum amounts for those groups of monthly wages, where employees currently receive significantly lower remuneration than similar positions in the private sector (for wages and salaries group 10-16). 

At the same time, it should be emphasized that additional funding for the increase of monthly wage scales will not be granted. One of the tasks included in the reform plan is to achieve a reduction of 6% in the number of employed in state direct administrations. As a result, the funds saved will be left at the disposal of the authorities in order to increase remuneration for other employees of the institution. In other words, a reduction in the number of employees in accordance with the plan of reforms is a prerequisite for increasing the maximum monthly salaries. 

Amendments to the Law on Remuneration provide that, upon termination of the legal (official, employment) legal relationship by mutual agreement, an employee may be granted a severance pay up to three months' average earnings. Institutions, when deciding on redundancy benefits, have to take into account the value of the post (liability level and complexity), ie higher value posts with a higher amount of benefit.

The amendments also set criteria for assessing which employees will have the advantage of staying in employment if the number of employees is reduced or the position is eliminated. 

The proposed amendments are a first step in the review of the remuneration system and the State Chancellery will continue to work on improving the single remuneration system in order to implement a work-based remuneration policy and raise the level of remuneration to 80% of wages for similar posts in the private sector. 

Amendments to the Remuneration Act are one of the tasks included in the Public Administration Reform Plan. 

In order to come into force amendments to the law, they must acquire the support of the Cabinet and subsequently the Saeima. 

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