Approval of the new minimum living wage from 2021

LEGAL DIGEST \ 24.11.2020

The State Duma of the Russian Federation, in the first reading, approved a new amount and procedure for calculating the subsistence minimum and minimum salary (minimum living wage) in 2021.

According to the new methodology, starting from January 1, 2021, the federal minimum living wage will increase by 5.5% and will be 12,792 rubles. If the bill is passed by the State Duma in the final reading and signed by the Head of the Russian state, the calculation of the subsistence minimum and the minimum living wage will depend on the median salary and median income. Currently, the minimum living wage is set not lower than the subsistence minimum of the able-bodied population in the country as a whole for the second quarter of the previous year.

The median salary is the amount relative to which the salary level is higher for one half of the population, and lower – for the other half. With the new approach, the minimum living wage will be 42% of the specified median.

To calculate the subsistence minimum, the figure of median per capita income will be used, which depends on the level of income of the majority of citizens and will increase as it grows. The amount of subsistence minimum will be 44.2% of the median.

The condition that the minimum living wage should not be lower than the subsistence minimum for the next year remains.

The federal minimum living wage is used to calculate temporary disability allowance in the following cases:

• if the employee has no earnings in the payment period or his or her earnings are less than the minimum living wage;
• if the employee’s length of employment is less than 6 months;
• if the employee did not follow regimen of treatment, and the doctor made a note in the sick leave.

Apart from the federal minimum living wage, the territorial entities of the Russian Federation set their own minimum living wage figure. Preliminarily, for 2021, its regional amount is:

• for Saint Petersburg – 19,000 rubles;
• for Moscow – 20,361 rubles.

Acsour monitors changes in the minimum living wage amounts and will inform you about the need for adjustments to human resources documents.