Background

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.

New legislation

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.