Domestic Economy

Parliament to Probe Government Paychecks

Parliament to Probe Government PaychecksParliament to Probe Government Paychecks

Parliament Speaker Ali Larijani has ordered an official investigation into government salaries after public outrage over high executive pays.

Larijani ordered the Supreme Audit Court of Iran to investigate salaries in government organizations and companies, Boursepress reported on Friday.

“A comprehensive report on these salaries will be given to the Parliament soon,” the head of the Supreme Audit Court, Amin-Hossein Rahimi, told ICANA.

“The things that have recently been publicized as astronomical salaries pertain to people who have not abided by the law and have in reality broken it.”

The investigation comes two months after a monthly paycheck of an insurance executive was leaked in the social media causing nationwide protests.

The unnamed executive with the Central Insurance of Iran was paid 870 million rials (more than $25,000) that month, nearly 60 times the average pay in Iran.

The leak led Mohammad Ebrahim Amin, CII’s chief executive, to resign. Economy Minister Ali Tayyebnia ordered an investigation, which found much of the paycheck had been back pay.

However, later comments by the deputy head of the Nursing Organization of Islamic Republic of Iran, Mohammad Sharifi-Moqaddam, about monthly payments of 700 to 900 million rials ($2,170-$26,000) being normal and further paycheck leaks from banks and automakers rekindled a public fury. In one case, an anonymous board member in an unnamed auto manufacturing company reportedly received 3 billion rials in the last Iranian year (ended March 2016), according to Tejarat-e Farda weekly.

State-owned ISNA reported of a 2-billion-rial ($86,500) monthly paycheck in a state-owned bank.

These pay figures are chump change of Wall Street executives. But bear in mind that the leaked paychecks belong to public service officials in a country with a minimum pay of 8,120,000 rials ($234) monthly and a GDP per capita of $4,800 a year.

The economy minister called these payments “relics of the former administration”.

Vice President Es’haq Jahangiri also ordered the reorganization of executive pay in the government during this fiscal year.

There is a division among government agencies on pay. Salaries in ministries and organizations are low. But in banks, insurers and some other companies that have their own payment regulations, the pay exceeds the stated salary “many times over”, Boursepress reported.

“Organizations that do not fall under Public Service Law have each used various regulations to get permits for increasing salaries,” said the audit court’s head.

The so-called loophole for such payments comes down to the application of different pay scales within the government.

According to Rahimi, the maximum or minimum actual pay is not specified in the law. Instead, salaries are capped at seven times minimum pay. However, actual pay can easily shoot up using various bonuses.

Ali Asghar Mohammadi, a lawyer, contends that the law does not allow for such payments at all and all these payments breach it. If we consider minimum pay to be about 9 million rials ($260), then the maximum would be 63 million rials ($1,816). Even if we add benefits that fall outside the payment regime, salaries should not go higher than 100 million rials ($2,880), said the legal expert on national TV.

The head of Supreme Audit Court said there are still exceptions in regulations that allow pay to go higher.

Nevertheless, the public service law, which is expected to regulate pay, has obviously not been applied in letter or spirit by all government branches.