Amended Labour Code introduces stricter conditions for wage deductions
The latest amendment of the Slovak Labour Code, which came into force on 1 January 2009, tightened the conditions under which an employer may make deductions from an employee’s salary. Prior to the amendment, the amount of wage deductions was not limited. Provided that the employer obtained prior written consent of its employee, deductions could be made up to an amount equal to the employee’s wage.
Pursuant to obligations stemming from binding international conventions (European Social Charter), Slovakia has limited the amount of permissible wage deductions. As of 1 January 2009, deductions from employees’ wages are permitted only to the extent provided for by statute, which guarantees individuals in Slovakia receipt of a certain minimal amount of cash, known as the living wage. Employees have to receive the minimal amount irrespective any agreement with the employer to the contrary.
Effect on employers
The limitation of wage deductions weakens the position of employers as it may take longer to settle their claims against employees. Although it is not necessary to review agreements on wage deductions entered into prior to 1 January 2009, employers may execute these agreements only to the new statutory extent. Any wage deduction exceeding the statutory limit is regarded as an unlawful failure to pay a wage and could lead to claims by the affected employees against their employers.
Further potential consequences of the employer’s failure to pay the guaranteed minimal amount of wage is the possibility of immediate termination of the employment relationship by the employee if the whole amount of statutorily guaranteed wage is not paid within 15 days after the expiry of its due date.
In addition, the employer may incur criminal liability for its failure to pay the guaranteed minimal amount of wage and may be subject to a prison sentence of up to 3 years.
The rates for minimum hourly and monthly wages are set by the regulation of the Slovak Government for each calendar year and apply to all employees.
As of 1 January 2009, the hourly and monthly rates for the minimum wage are increased as follows:
Minimum hourly wage: 1.698 Euros
Minimum monthly wage: 295.5 Euros
Effect on employers
Employers must comply with the prescribed minimum wage amounts. The average monthly salary in Slovakia is 705 Euros, so it is likely that the majority of employers already comply with this legislation.
Changes to the Act on Travel Allowances
According to the Slovak Act on Travel Allowances (Act No. 283/2002 Coll.), an employee is entitled to receive travel and other allowances in relation to business trips from his employer. The Act also specifies the employer’s and employees’ rights and duties in relation to business trips. The amendment to the Act on Travel Allowances, which came into force on 1 January 2009, sets forth a number of changes in relation to travel allowances and business trips.
The amendment imposes a new duty on employers to provide employees with travel allowances for travel to an employee’s regular workplace outside of regular working hours, based on the employer’s order or consent.
The amendment further introduces an option for both the employer and employee to agree on an “interruption” to the business trip, either at the beginning or at the end. The aim of this provision is to allow the employee to spend some extra time at the destination of the business trip. For example, a travelling employee may wish to stay at the destination for a weekend after he has finished work on Friday evening. When a business trip is interrupted in this way, the employee is not entitled to any subsistence allowance, pocket money, or compensation for accommodation for the period of its interruption.
Under the new Act, an employee whose job requires frequent change of workplace (for example, a train conductor) is afforded increased subsistence entitlements. An employee is entitled to a subsistence allowance where he has had two or more business trips exceeding 5 hours in total (but each individual trip lasting not longer than 5 hours) during one continuous working period which covers two calendar days.
Contrary to the previous position, an employer can no longer agree with its employee to limit his travel allowance to public transport prices where, at the employer’s request, he uses his own vehicle for the business trip. Instead, the employer must provide the employee with a statutory allowance for each kilometre of the journey, which corresponds to the depreciation and a statutory allowance for fuel consumption of the vehicle.
According to the new legislation, an employee must notify his employer, without undue delay, of any fact which may affect the provision of allowances.
Effect on employers
It is not anticipated that the above will have a significant financial impact on employers.