Ministries speedy to raise wage

Photo: Marko Saarm

Bountiful bonuses persist even after law to curb them entered into force, as revealed by fresh data on salaries in ministries.

As justice minister Kristen Michal (Reform Party) pushed through fresh Public Service Act (PSA) in 2012, his message was clear: pay wages more competitive in ministries, stop the stupid benefits for diplomas, language skills, seniority and the like.   

PSA, having entered into force on April 1^st last year, did indeed do away with wage ceilings and untie ministerial hands to pay employees bigger basic salaries. Even so, the option to offer benefits remained under the definition of variable pay which can be given for effectiveness and doing extra tasks, or as award.

As evident in wage data presented by ministries, yesterday, social ministry led the pack in variable pay during April and December of 2013: three quarters of officials got a 13^th salary or even more than that. The trend at social ministry may be due to their basic wages being among the lowest, bonuses thus a means to keep the staff.

Nearly as eager to pay «variables» were interior and finance ministries. Culture ministry rained equal €500 bonuses on officialdom; ministry of education shunned variable pay almost altogether.   

The top benefits of 2013 range between €4,000 – €11,000; mostly, these were lavished on top officials leaving their posts.  

«This is clearly not allowed by law and we do not approve such golden handshakes as good practice,» said Cerlin Pesti, public administration and service chief at finance ministry. «The trouble is: the rules are there, but we cannot punish ministries for violating them.»

With some of the topmost variable payments, the ministries have indeed broken the law, as variable pay may only be granted up to a fifth of an official’s yearly basic wages. In several instances, the line has been crossed.

«If the head of an agency has decided to rather go for the variable pay, the next time we will be certainly asking him why he thinks this is the better solution,» assured Ms Pesti. According to her, analysis of wages and advice to ministries will be completed by autumn.

Meanwhile the law amendment hasn’t gone without an effect – as basic wages also have heartily risen, at ministries. As revealed by analysis performed by Postimees: as at April 1^st this year, the average basic monthly salary of an official had done a 12-months-jump of 10 percent, in social and economy ministries. In agriculture ministry, the increase only amounted to 5.2 percent year-on-year.  

Wage rise amongst officialdom is led by vice chancellors and department heads, whose salaries tended to increase by €100–€300. The highest echelons of ministers and chancellors gained a 21-percent wage rise starting 2014, whereby a minister’s salary rose to €4,420, and €3,978 now paid to chancellors.

Riigikogu finance committee deputy head Sven Sester (IRL) thinks it wrong for the public sector to act as engine for wage rally. At the same time, as shown by statistics of these past years, this hasn’t been the case. According to Mr Sester, it’s good for ministers to be able to pay officials extra – for success. 

«Surely, if almost everybody is paid extra for success then the original idea has been lost. On the other hand, the more such questions are being asked, the clearer it becomes for the decision makers that they are under public control. In private sector, it’s up to an entrepreneur what he does with his money; in public sector, it’s taxpayer’s money.»