Trade unions oppose government interpretation of 40 per cent wage cost limit

Trade unions Peo and Sek on Friday sent a joint letter to the interior minister, expressing opposition to the government’s interpretation of how municipal wage costs are calculated under the 40 per cent legal limit.

The unions say the government is attempting to impose interpretations that, in their view, change the meaning and purpose of the law. They stress that such interpretations contradict the discussions and agreements previously reached on calculating municipal wage costs in relation to the 40 per cent threshold.

They recall that in November 2024, following dialogue, a compromise was reached between the ministry of interior, the union of municipalities, and the unions on the calculation method.

The unions claim they have learned that the government does not intend to apply this agreement for 2026. They warn that the alternative approach could increase total municipal wage costs, causing some municipalities to exceed the 40 per cent limit, with potentially negative financial and administrative consequences.

They insist that either the 2024 agreement should continue in 2026 or, if not, the law should be applied strictly, which requires including “all types of municipal expenses” in the wage cost calculations to determine compliance with the percentage limit.

The unions conclude that a unilateral government interpretation risks creating disruption in municipalities, unnecessary tensions, and adverse labour outcomes.