Payments, Deductions, Payroll, Record Keeping, Penalties.
Important provisions on the protection of employees’ wages in accordance with the Protection of Wages Law 35(I)/2007, as amended (the “Protection of Wages Law”):
As a rule, employers must pay employees’ salaries as follows:
Cash payments are allowed only in exceptional cases explicitly outlined in the Protection of Wages Law.
Salary deductions allowed under the Protection of the Wages Law but not explicitly provided thereunder must be consented in writing and signed by the employees in a prescribed form. Employers must keep record of such written consents together with the reasoning behind such deductions.
Employers must provide employees with payslips in written or electronic form, within five (5) working days from the date of payment.
The minimum information to be included in such payslips includes: Details of the employer and employee (name, address, identity and social security number/employer registration number); payment date; period covered by the payment; payment details (basic salary with reference to the number of weekly working hours, overtime pay with reference to the number of overtime hours and method of calculating overtime compensation, any other payments); employee’s contributions/deductions (Social Insurance Fund, General Health System and other contributions that may be provided by law or regulation or written agreement or collective agreement); employer’s contributions (Social Insurance Fund, General Health System, Social Cohesion Fund, Redundancy Fund, Human Resources Development Fund and other contributions that may be provided by law or regulation or written agreement or collective agreement); other information where applicable (automatic indexation, commission, 13th salary, 14th salary, travel allowance, contribution to the Central Holiday Fund, employer and/or employee contributions to Provident Fund).
Employers must keep records of employees’ net and gross income, including any salary deductions carried out. Such records must be kept by employers for a period not exceeding six (6) years and should be readily available for inspection.
Where a company – employer commits an offence under the Protection of Wages Law, such company – employer’s officials (director, president, secretary or other similar position), provided that it is proved that the offence has been committed with the consent or contribution of such officials, have direct criminal liability which may lead to a fine not exceeding €15.000 or imprisonment not exceeding six (6) months or to both penalties.
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