An employment contract must be entered into in writing prior to the commencement of work. The amount of remuneration and the time of disbursement must be indicated in the employment contract. Information regarding remuneration may be substituted by a reference to the respective provisions included in the laws and regulations, in the collective agreement or by a reference to the working procedure regulations. In such a case, the employer ensures that the abovementioned information is available to employees of the undertaking free of charge and that it is comprehensible and complete, easy to access, also using electronic means, including online portals or information systems. (Section 40)
In accordance with the Labor Law, the amount of the monthly salary must be indicated in the employment contract if a time wage or hourly wage is specified for the employee. If a piecework wage has been specified for the employee, the employment contract must contain a reference to the internal regulations developed by the undertaking (statute, rules), which, as per Section 40 of the Law, must be freely accessible to the employee. The abovementioned amounts should be quoted as gross wage or salary, i.e., before taxes are calculated and withheld. One may wonder, why not present a net salary (payable wage)? It should be borne in mind that the net salary may vary depending on the non-taxable minimum and the number of dependents, or depending on whether the employee has designated the undertaking as the principal place of work. When hiring an employee, an explanation must be provided as to what the potential net salary could be based on the information provided by the prospective employee.
Remuneration is the regular pay for work to be disbursed to an employee, and it includes the wage and supplements specified in laws and regulations, the collective agreement or employment contract, as well as bonuses and other kinds of remuneration related to work. (Section 59)
An employer shall organize a time wage system or a piecework wage system in the undertaking, and a system of supplements and bonuses in accordance with the laws and regulations and the collective agreement (Section 62). A collective agreement is not mandatory; it is drawn up and adopted in the undertaking at the choice of the employer. A collective agreement usually specifies various additional incentives for employees, such as paid meals.
An employment contract must also specify any potential supplements:
- for night work, a supplement of not less than 50 per cent of the hourly or daily wage rate specified for the employee is provided, but if a piecework salary has been agreed upon, a supplement of not less than 50 per cent of the piecework rate for the amount of work done (Section 67);
- for overtime work or work on a public holiday, a supplement of not less than 100 per cent of the hourly or daily wage rate specified for the employee is provided, but if a piecework wage has been agreed upon, a supplement of not less than 100 per cent of the piecework rate for the amount of work done (Section 68).
When disbursing remuneration, an employer must present a calculation of the remuneration in which the remuneration disbursed, the taxes deducted and the mandatory State social insurance contributions made, as well as the hours worked, including overtime hours, and the hours worked at night and on public holidays, have been specified. At the request of the employee, the employer is obliged to explain this calculation (Article 71). As a general rule, employees receive this calculation of the remuneration by email, which is an information-only document.
Given the fact that many undertakings are outsourcing accounting and there is no on-site accountant in the undertaking, this should be done by the management of the undertaking in question.
The minimum wage may not be less than the minimum level determined by the State (Article 61).
The minimum object of mandatory contributions in a quarter is three minimum monthly wages stipulated by the Cabinet. If a person is an employee with several employers or concurrently an employee and a self-employed person, the objects of mandatory contributions declared for the person are added up (Law on State Social Insurance, Section 20.4).
In 2024, the minimum quarterly gross wage is EUR 2 100, also for part-time workers. The laws and regulations specify the types of persons for whom minimum social contributions are not mandatory (main groups of such persons):
- persons who have reached the age giving them entitlement to a State old-age pension or who have been granted a State old-age pension (including early retirement);
- persons with Group I and II disabilities;
- persons with disabilities under the age of 18;
- persons in whose tax booklet or that of the spouse, a child who has not reached the age of three years old is registered;
- persons in whose tax booklet or that of the spouse, three or more children up to 18 years of age or up to 24 years of age, of whom at least one child is younger than seven years old, while a child is continuing the acquisition of his or her secondary, vocational, higher, or special education are registered;
- persons in whose tax booklet or that of the spouse, a minor child is registered who, in accordance with the laws and regulations, has been recognized as a person with a disability;
- persons up to 24 years of age who are studying at a secondary, vocational, higher (full-time studies), or special educational institution, except for the time when the relevant person has interrupted his or her training or studies.
Those persons may therefore have a gross wage of less than EUR 700 per month indicated in their employment contract, or, in the case of an hourly wage indicated, and keeping records of the hours worked, their gross wage may be below the minimum level specified by the State.
