Work and Wages

This page was last updated on: 2021-09-09

Minimum Wage

Minimum wages were governed under the Wages Act of 1994. However, since the passage of Employment Contracts Act in 2008, minimum wages are now regulated under the new Act and every year government publishes a new agreement on minimum wages. 

The government establishes the minimum wage in the country for a specific unit of time (be it hour, day, week or month) through a regulation. There exists only a single national minimum wage in the country. As an exception, there also exists a minimum wage for basic and upper secondary school teachers. There are also collective agreements in certain sectors (health care, road transport, etc.) that set their minimum wages but are not signed by the government into law. The unions in Estonia are actively working towards sectoral minimum wages. No sectoral, occupational or regional minimum wages are defined. An employer is required not to pay a worker less than the minimum wage announced by the government.

Minimum wage is determined through an agreement between the social partners, i.e., the Confederation. The criteria for determining or updating minimum wages includes needs of workers and their families; cost of living; consumer price index/inflation rate; productivity; and level of wages and income in the country.

The Labor Inspectorate is a government agency working under the Ministry of Social Affairs. The main tasks of the Labor Inspectorate are implementation of the working environment policy, state supervision of compliance with the requirements of the legislation on health and safety at work and labor relations in the working environment, informing the public, employees and employers about the risks of the work environment, and resolving individual labor disputes in pre-trial labor disputes bodies. Thus, it is the job of Labour Inspectorate to ensure compliance with minimum wages. The Employment Contract Law however does not specify any monetary fines for violation regarding minimum wages.

Sources: §29(5-6) of Employment Contracts Act; Regulation 166 on Introduction of Minimum Wage; Palga Alammäära Muutmise Põhimõtete Kohta 2008

Current minimum wage rates can be found in the Minimum Wage section.

Regular Pay

Wages are the remuneration which an employer pays to an employee for work performed in accordance with an employment contract, legal instrument or in other cases prescribed by legislation, a collective agreement or employment contract. Wages are comprised of basic wages and additional remuneration, bonuses and additional payments paid in the cases prescribed by law.

The relevant law on payment of wages is Employment Contracts Act. An employer is under obligation to pay wages to the work under the conditions and at the time agreed on. The wage period may vary for different workers however it cannot exceed one month. Wages have to be paid at the end of wage period in the form of money and legal tender. Wages in kind are not allowed. If a pay day falls on a public holiday or weekly rest day, pay day is deemed to be the day preceding the public holiday or day-off.

There is no clear indication in the law on the number of days at the end of a wage period within which wages have to be paid to a worker. On a pay day, an employer is required to transfer an employee's wages and other remuneration to the bank account indicated by a worker, unless otherwise agreed.

The tax liabilities on an employee are debited from a worker's wages.

Sources: §28(2), 29 & 33 of Employment Contracts Act

Regulations on Work and Wages

  • Töölepingu seadus / Employment Contracts Act
  • Määrus 166 Töötasu alammäära kehtestamine / Regulation 166 on Introduction of Minimum Wage
  • Määrus 179 Põhikooli ja gümnaasiumi õpetaja töötasu alammäär / Regulation 179 on Minimum Wage for Basic and Upper Secondary School Teachers
  • Palga Alammäära Muutmise Põhimõtete Kohta 2008 / Minimum Wage Revised Principles for 2008

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