taxlaw-en

Copyright 2021 I. Skouzos & Partners.
All Rights Reserved.

espa

Legal issues of wage under Greek labor law

Iason Skouzos & Partners > Practice Areas  > Labor & Employment  > Legal issues of wage under Greek labor law

Legal issues of wage under Greek labor law

MInimum wage obligations under Greek labor law

Under Greek law there are minimum wage requirements. There are various stages of control of the minimum wage.
One is the “National General Collective Employment Agreement” which imposes a general “floor” applicable to all employees of all specializations. The current wage “floor” ranges from €510,95 [young employees under 25 years old with less than 3 years of completed employment time] to €761,90 [employees above 25 years old with more than 9 years of previous employment].
As a second stage (or “floor”), for most categories of work specialties (“classes”) there are “class agreements” that provide for higher salaries and for generally more advantageous terms for the employees. These prevail over the National agreement.
Class agreements have a period of validity (1,2,3 years), after which there is a buffer 3 month time-zone during which the validity is extended. After the lapse of the 3 month extension there are still some provisions that survive (in other words, the protection for the employee will not automatically fall down to the level of “last frontier” protection of the National agreement).
As a third stage we have the so called “business agreements” that are collective agreements between the employer and the employees. This is a relatively new type of arrangement.

Lastly, we have the employment agreement, which exists between the employer and each specific employee. This would provide for the “contractual salary”. The contractual salary is always higher than the minimum salary, because the minimum salary will prevail over any arrangement which is worse for the interests of the employee.
definition of wage – what is included in the wage – what is excluded
As wage is defined any remuneration in money or in kind (e.g. food, housing, utility bills payment) which is paid regularly. Any remuneration which is additional to the main wage is also included in the definition (i.e. the calculation) of the total wage. According to the case-law, performance or production bonuses, agency fees etc, if they are provided regularly (whether by virtue of a contractual provision or tacitly) are also considered as wage.
The reimbursement in the form of monetary compensation to an employee for the expense of travelling from his place of domicile to his work and back is also considered as part of the wage and is taken into account for the calculation of the total wage.  Any travelling allowances that have a permanent character, i.e. do not depend on the mobility of the employee, are considered also as part of the wage.
Any payments that are made freely by the employer, without an obligation from his part to continue them are not considered as part of the wage.

Allowances
Without prejudice to any allowances that are provided in the various “class agreements” that may survive, most types of allowances have been abolished (by virtue of laws taken as a part of Greece’s austerity measures).

4 allowances are still applicable:
a) children’s allowance
b) university degree/academic qualification allowances
c) dangerous or unhygienic work  allowance
d) maturity allowance (which takes into account total working years of the same employee in any employer)

Reference/calculation period
Payment is generally made after the work is performed. There is no specific provision that provides for payment on a specific day of each month but this is standard practice. The usual is once a month, on the first days of each month.
A salary is always calculated x 14, including 1 salary which is payable as Christmas bonus, ½ salary as Easter bonus and ½ salary as holiday bonus. There is a reference period for Christmas bonus and for Easter and Holiday bonus because, there is a deadline, which is usually a few days before the relevant break.

Important notes:
– Some bonuses and allowances applicable by law are calculated on the minimum salary and some on the actual (contractual) salary.
– Overtime pay must be paid as a separate amount and shall be very explicitly specified as such. If, for example, an employee is paid monthly €500 in excess of his salary, on a regular basis, this amount cannot be counted for overtime pay unless this is explicitly mentioned in the contract and under the condition that the employee will  refund this sum to the employer if the overtime does not take place.
– Managerial employees are not entitled to overtime; whether an employee is a manager or not is a matter of fact, not a matter of contractual wording.
– An issue which is probably of relevance to the types of contract that we are dealing with is the so called “readiness” for work. When an employee is in a “stand-by” position, ready to provide his services to the employer, this is sometimes subject to the ordinary employment law provisions. There is a distinction (which has an economic significance) between “genuine readiness for employment” and simple readiness for employment. The former with the later differ in terms of the level of involvement and restriction imposed to the employee.