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Monday, March 12, 2018

The unions are asking Putin to put wages in priority

Salaries should be a priority over other mandatory payments. With such offer to Vladimir Putin asked the Chairman of the Federation of independent trade unions of Russia Mikhail Shmakov. According to him, it is necessary at the legislative level to oblige the employer in the first place to pay the wages of the employee and only after that to make contributions to the social funds and tax. Thus, it is planned to reduce the debts on wages, which now is growing like a snowball. The idea of trade unions the President has supported. But independent experts fear that this initiative will further drive domestic companies into debt, and with them the entire national economy.

photo: Gennady Cherkasov

The delay of wages in Russia are not uncommon. And desperate to get your money, the staff resorted to extreme measures. For example, the miners in the Rostov region declared a hunger strike. And many such cases.

Currently, the total wage arrears in the country is 3 billion 804 million rubles.

To combat this trend Mikhail Shmakov offers at the highest level — to adopt a law, which will enhance the priority of salary to other benefits. The fact that now, under article 855 of the civil code, primarily the employer pays cash “for satisfaction of requirements about compensation of harm, caused to life and health, and also requirements about collecting of the alimony”. Then there are the severance packages. Only then are paid salaries and mandatory payments. In particular, the Pension Fund, mandatory medical insurance and so on.

And if there are sufficient funds in the account, the employer pays the salary and mandatory payments together. That is, they are in equilibrium. If the money’s not enough, the employer may postpone the payment of employees and to give preference to mandatory payments to him have not accrued penalties and interest. As a result of growing debt of enterprises to the employees.

Therefore, as experts explain, the priority of payment of wages will play into the hands, of course, employees. “Timely payment of wages will enable people, for example, to perform on time their loan obligations. The lack of concern in the delays in payments can potentially lead to an increase in consumer spending, as people will not try to stretch the available funds until your next payday, which will be who knows when. While domestic consumption makes a significant contribution to the country’s GDP”, — the analyst of Forex Club Irina Rogova.

In addition, employers will try to make payments in a timely manner for fear of fines and penalties.

However, there is another side to the coin. “If the enterprise is not enough money for all required payments, and the salary they must pay, then there is a probability of late payment of taxes. And this is will negatively affect the budgets of all levels. The budget deficit is including lack of money for social payments, indexation”, — the expert warns.


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