State could lift minimum social insurance contributions

The new requirement to pay minimum state social insurance contributions may be lifted, Latvian Prime Minister Maris Kucinskis said on the morning news program of the LNT television on Wednesday.

He said the requirement could be lifted if a simpler mechanism was devised for planning social insurance contributions.

Discussions are under way with business representatives and the ministries, and the parliamentary committees also are working on the subject. Proposals are being submitted about exceptions to the new rules.

The prime minister said that replacing the newly-adopted requirement with a simpler and more understandable mechanism was being discussed and a solution to the problem could be found this week.

In order to ensure at least minimum social guarantees to people earning less than the minimum monthly wage, the minimum level of state social insurance contributions was to be introduced on January 1, 2017, with employers expected to contribute the difference between the mandatory minimum contribution and the contribution that was to be made for employees based on their actual wage, if lower than the minimum wage.

For such employees, the mandatory minimum social insurance contribution will have to be made to 75% of the minimum monthly wage in 2017 and to 100% of the minimum monthly wage, starting from 2018.

The new requirement has already been criticized by non-governmental organizations and business representatives.

The parliamentary committee on social and labor affairs this week in principle upheld additional exceptions to the requirement about payment of social contributions based on the minimum monthly wage for employees earning less than the minimum wage.

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