The cost of living weekly wage increase will be about €4.08 next year, according to the latest workings of the legally binding mechanism.
The wage adjustment is linked to fluctuations in the inflation rate over the past year until September.
The figure was mentioned by Joe Farrugia, director general of the Malta Employers’ Association, who said this would create an additional burden on employers.
Employers would be bound by law to pay the weekly increase as from January.
Official figures show that the average inflation ranged between 2.8 per cent in October 2011 and 2.3 per cent in September this year.
Mr Farrugia said employers had long been calling for wage increases to be indexed to productivity instead of inflation.
“It is dangerous to link wages to inflation and even the European Commission and the International Monetary Fund have repeatedly warned the Government of this,” he said.
He shot down a proposal made by some unions to have the cost of living adjustment worked out twice a year, insisting it was “unworkable”. It was already difficult for employers to plan ahead in the prevailing situation, he added, let alone if wage increases were awarded twice a year.
“If our proposal is shot down, the least that can be done is to award the COLA increase only to minimum wage earners,” Mr Farrugia said.
But in a pre-electoral phase when political parties are drawing up their electoral manifestos, COLA is just one of many worries employers have.
The association wants political parties to agree on a commitment to reduce the national debt by two percentage points a year.
Debt is now approaching 75 per cent of GDP, significantly up from below the 60 per cent mark a decade ago.
Most of the debt is in the form of domestically held government bonds, which eases the risk of exposure to external factors.
“Internal debt is less worrying than having external debt but we must not put our minds at rest because debt servicing represents a substantial part of public expenditure,” Mr Farrugia said.
He cautioned political parties not to raise the stakes too high, which was a big temptation in a polarised system. Employers would want to know how the promises made would be financed, he added.
The debate should focus on how debt could be cut, Mr Farrugia said, linking this to another proposal by the MEA for the inclusion of technocrats in the Cabinet.
“Unlike other troubled countries in the EU, we want technocrats to contribute before problems crop up. Other countries roped them in when the house was on fire. We want to prevent the fire from breaking out,” he said.