By Dušan Nitschneider and Martin Oross. Firm: Nitschneider
Employment law developments in Slovakia in 2020 will include an increase in the minimum wage, longer holidays for younger workers and the introduction of vouchers to support employee’s children’s sporting activities.
As the current parliamentary term ends, we offer an overview of significant legislative changes, which mainly affect labour law.
The implementation of Directive 2018/957 amending the Directive 96/71/EC concerning the posting of workers in the framework of the provision of services and the related amendment to the Labour Code will bring, on the one hand, better working conditions for workers from economically weaker countries but, on the other, higher costs for employers who provide their services through cross-border employees.
With effect from 30 July 2020, an employee posted to work in Slovakia will be guaranteed the application of Slovakian labour law provisions. In particular, these include the conditions of accommodation provided by the employer to employees outside their usual place of work and travel expenses. However, for long-term postings (more than 12 or 18 months) the Labour Code will applied almost in its entirety, with only a few exceptions.
Sports vouchers will be introduced following holiday vouchers
Another amendment to the Labour Code comes into effect on the first day of 2020 and gives employers the opportunity to contribute to the costs of employees’ children's sports activities. However, employees will not have a legal entitlement to this contribution; employers will provide it on a voluntary basis. The contribution will only be granted to an employee whose has been employed for at least two years and the employee must also submit an accounting document issued by an authorised person (which is a registered sports organisation) within 30 days from the date of issue. The employee must apply for the allowance and it is limited to 55% of the eligible expenditure, up to a maximum of EUR 275 per calendar year.
MPs also tried to ensure that employers' obligation to provide holiday vouchers was extended to all employers, not just employers who employ more than 49 employees. However, this proposal was not passed.
The minimum wage for 2020 and change in the method of determining the minimum wage
The gross monthly and hourly minimum wage for 2020 has been set by Government Regulation, No. 324/2019 Coll. The minimum monthly wage for an employee will be EUR 580 and the hourly wage will be EUR 3.333 per worked hour. The monthly wage increases by EUR 60 and the hourly wage increases by EUR 0.344.
The annual increase in the minimum wage by the government is quite significant, but it is not the only major change affecting the minimum wage. The government regulation above adjusting the minimum wage is likely to be the last for the coming years.
This is because, most importantly, the National Council also passed a parliamentary bill that changes the whole system of setting up the minimum wage. Surprisingly, MPs have managed to implement a change for setting the minimum wage procedure since 2021 smoothly and have taken away this privilege from the government.
Going forward, the adjustment of the amount of the monthly minimum wage is decided by employer's representatives and employee representatives. The amount of the monthly minimum wage agreed by them will only be notified to the Ministry of Labor, Social Affairs and Family.
However, if they fail to reach an agreement, they will have to discuss their minimum wage proposals with the Economic and Social Council of the Slovak Republic. The aim of these negotiations is again to reach an agreement between the so-called social partners.
If an agreement cannot be reached even with the assistance of the Economic and Social Council of the Slovak Republic, the monthly minimum wage will be determined by law, as 60% of the average monthly nominal wage of an employee in Slovakia from two years previously.
The assistance of a spouse, sibling or direct relative not illegal employment or work
The amendment of the Act on Illegal Work and Illegal Employment stipulates that in the event that an entrepreneur or one-person limited liability company (in which a partner is a natural person) is assisted by a direct relative, sibling or spouse, this cannot be considered as illegal work or illegal employment.
However, care should be taken to ensure that the working person is either:
- A student under the age of 26; or
- Pension insured or already receiving a pension. This does not have to be a retirement pension, but can also be an invalidity pension, service pension, orphan's pension or widow's or widower's pension.
These changes will also be effective from 1 January 2020.
Five weeks’ leave for under-33s
In conclusion, we note that employees under the age of 33 can also enjoy five weeks of holiday from 2020. However, they must be responsible for taking care of a child permanently.
Like most of the legislative changes described above, this is very much appreciated by employees. On the other hand, employers do not perceive such changes so positively, because after the recent experience with holiday vouchers, it is clear to them that their administrative support will experience an additional workload and employment costs will also increase.