Labour Code amendment passed. How will it impact employers?

The amendment of the Labour Code introduces several changes from 1 May 2018.

Among them are wage surcharges for work on a Saturday and a Sunday which will be introduced in two stages, and also an increase of certain wage surcharges which are already included in the current Labour Code, specifically for night work and work during public holidays.

The increase of the wage surcharge will be mandatory for all employers, while the specific percentage by which the surcharges are to be increased will depend on the fact, whether the employer falls under a legal exception.

The amendment also regulates the possibility of employers to grant employees a 13th and 14th salary which, if the employee meets certain conditions, will be exempt from taxes – but only up to EUR 500.

You can find more details below.

The following regulation will apply from 1 May 2018 until 30 April 2019:

  • increase of the wage surcharge for work on a public holiday from 50% to 100% of the average wage for each hour of work;
  • increase of the wage surcharge for night work from 20% to 30% of the minimum wage for each hour of work, i.e. by EUR 0,827 for each hour of night work in 2018, and in case of employees doing risk work, to 35 % of the minimum wage;
  • introduction of a wage surcharge for work on a Saturday in the amount of 25 % of the minimum wage for each hour of work, i.e. by EUR 0,69 for each hour of work on a Saturday in 2018;
  • introduction of a wage surcharge for work on a Sunday in the amount of 50 % of the minimum wage for each hour of work, i.e. EUR 1,38 for each hour of work on a Sunday in 2018;
  • introduction of the abovementioned surcharges for people performing work outside employment.

1 May 2019 will see another increase of the wage surcharges up to the following final amounts:

  • wage surcharge for night work in the amount of 40% of the minimum wage, and in case of employees doing risk work, 50 % of the minimum wage for each hour of work;
  • wage surcharge for work on a Saturday in the amount of 50 % of the minimum wage for each hour of work;
  • wage surcharge for work on a Sunday in the amount of 100 % of the minimum wage for each hour of work;

Exceptions for small employers and employers where trade unions are active

If work is performed regularly on a Saturday, a Sunday or at night at an employer that employs less than 20 employees, such employer can arrange in the collective agreement or in the employment contract a lower wage surcharge for work on a Saturday (at least 20 % or 45% of the minimum wage per hour), on a Sunday (at least 40 % or 90% of the minimum wage per hour) and for night work (at least 25% or 35% of the minimum wage per hour).

The wage surcharge for work on a Saturday and a Sunday will not apply to work from home.

Currently, employees who work from home or telework are not entitled to wage surcharges for overtime work, night work or work in difficult conditions. Following the amendment, they will also not be entitled to wage surcharges for work on a Saturday or a Sunday.

13th and 14th salary

The Labour Code amendment also addresses the employer’s possibility to grant a so-called 13th salary, paid in June as holiday allowance, and a so-called 14th salary, paid in December as Christmas allowance. Under certain conditions, these allowances may be exempt from taxes and deductions, up to EUR 500 each.

The exemption from deductions and taxes applies, if the following conditions are met:

  • the 13th salary will be paid in full amount of the average monthly wage of an employee, who has worked for the employer continuously for at least two years as of 30 April of the respective calendar year;
  • the 14th salary will be paid in full amount of the average monthly wage of the employee, who has worked for the employer continuously for at least four years as of 31 October of the respective calendar year;
  • the employer can only grant the 14th salary to an employee who was granted the 13th salary.

Guaranteed wage disclosure

From May 2018, employers are obliged to include the basic salary in all job offers. The salary arranged with an employee in the employment contract cannot be less than the amount disclosed in the job offer.

 

 

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