Kyrgyzstan Committee Approves Bill to Reintroduce Salary Indexation

A parliamentary committee in Kyrgyzstan has advanced a bill that would reinstate mandatory salary indexation, a measure designed to protect workers' earnings from the corrosive effects of inflation. The bill, approved in its second reading by the Committee on Labor, Health, Women's and Social Affairs, aims to amend the Labor Code.

According to one of the bill's initiators, Gulnara Akimbaeva, the proposed changes would obligate employers to regularly increase employee wages to offset the rising costs of goods and services. Akimbaeva explained that a "legal loophole" emerged when the new Labor Code omitted a clause from the 2004 version that explicitly guaranteed protection against inflation. While the new code mentions a general right to "fair remuneration," the mechanism for automatic adjustments was lost, leading to disputes and leaving workers vulnerable.

The bill seeks to rectify this by adding to Article 91 of the Labor Code. National statistics show inflation peaked at 14.7% in previous years, significantly reducing the purchasing power of the population. The proposed legislation distinguishes between the public and private sectors. Public sector employees would receive adjustments according to procedures set by the Cabinet of Ministers, allowing the government to manage its budget. Private businesses would have more autonomy, with companies able to establish their own indexation rules in internal documents if no trade union or collective agreement exists. This flexible approach aims to prevent bankruptcies while ensuring worker rights are not infringed upon, though some deputies suggested setting a minimum indexation threshold for private firms.