On 1 September 2012 an amendment to Slovak Republic legislation, including the Labour Code, was passed by the National Council. It paves the way for more substantial reform of the Labour Code, expected in winter 2012 and to be effective from 1 January 2013.
The main aim of the changes is to reduce the number of employees engaged outside of an employment relationship, such as those working under temporary student contracts, work performance agreements and agreements on work activity. The changes increase the cost to the employer but also reduce the amount of net income for the workers. The term "student" is also to be defined.
The new definition of the term "student" will in future refer only to secondary school pupils and university students who study daily and are under the age of 26 years. Accordingly, this excludes quite significant numbers of university students that are older than 26 years or who are not in full-time education. The amendment also limits the maximum amount of average working time for students, which may not exceed 20 hours per week.
In terms of increased costs, there are to be new legal obligations on employers and workers to pay contributions to social security insurance and health care insurance. Currently, employers are only obliged to pay payments to social security insurance at the rate of 1.05% of an employee's income whereas employees make no contribution. In future employer contributions will vary from 1.05% to 35.8%, depending on many factors such as the nature of the contract, the employee's age, the amount the employee earns.