Lithuanian government and social partners agreed on Tuesday to increase the minimum monthly wage by 25 euros to up to 325 euros as of July.
The cabinet announced the decision after the sitting of the Tripartite Council, the main national-level social dialogue institution, which consists of trade unions, employers and representatives of the government.
According to the government, the decision was unanimous. Algirdas Butkevicius, Lithuanian prime minister, notes additional 14.4 million euros from the state budget will have been assigned to increase the minimum wage.
"It will allow increasing the real income to the residents, purchasing power will increase, domestic consumption will grow, therefore more income will return to the budget," said Butkevicius in a press release from the government.
The pay rise will have to receive the formal approval from the cabinet and the Seimas, Lithuanian parliament.
It's the third pay rise the current government led by social democrats have taken since the start of its work in 2012. Negotiations in the council for the pay rise have lasted for almost a year.
Meanwhile, Butkevicius revealed the minimum wage is to be increased by another 25 euros to 350 euros as of 2016. In an interview to national radio LRT the head of the government said financial health of the country is favorable for another minimum wage increase and that the plans had already been discussed with the finance minister.
The Tripartite Council has also approved the proposal to link the minimum wage rise to macroeconomic indicators in the future, reports business news website vz.lt.
The minimum wage in Lithuania is the lowest among Baltic countries with minimum Latvian pay of 360 euros and 390 euros in Estonia, and the third lowest in the European Union, after Bulgaria and Romania paying respectively 184 euros and 218 euros, according to Eurostat.