The amendment introduces salary regulations for employers in relation to management in cases where the employer is not profitable or does not fulfil its tax liabilities and payments to the insurance funds.
The amendment includes provisions which, according to the government, aims to balance the relationship between productivity of labour and the growth of salaries (ignoring inflationary effects).
Based on the amendment, an employer has to set salary increases at a level that is related to the level of productivity of the labour.
In case of breach of these regulations, the employer has to pay a "regulatory payment" to the state budget.
In addition, where employers do not achieve a profit or do not pay its tax and insurance obligations, then the salary of the management may be limited to 2.5 times the average salary of the employees in the period concerned.
An additional directive to this law will stipulate the permitted increase in salary levels at levels of 3,5 or 10%.
Should the wage regulation be introduced, companies are likely to face various accounting, tax and human resources issues. As consequence of the wage regulation application, payment of a wage penalty (tax non-deductible expense) and reduction of management's salaries may be required. Therefore, it would be advisable to consider in advance the potential impact of certain factors affecting wage regulation calculation, in particular profit and loss and amount and the structure of employees' renumeration.
The information in this newsletter is correct to the best of our knowledge and belief at the time of going to press. Specific advice should be sought, however, before investment and other decisions are made.
For further information contact Mr Frank Walsh on +421 7 5340 545 Email directly on [email protected].
You may also wish to read through related material on the Slovak Republic provided by Arthur Andersen. You can view the entire archive via the Internet on Business Monitor Online (http://www.businessmonitor.co.uk), or via your online provider by entering "Arthur Andersen" and "Business Monitor" as a free text search.
The amendment includes provisions which, according to the government, aims to balance the relationship between productivity of labour and the growth of salaries (ignoring inflationary effects).
Based on the amendment, an employer has to set salary increases at a level that is related to the level of productivity of the labour.
In case of breach of these regulations, the employer has to pay a "regulatory payment" to the state budget.
In addition, where employers do not achieve a profit or do not pay its tax and insurance obligations, then the salary of the management may be limited to 2.5 times the average salary of the employees in the period concerned.
An additional directive to this law will stipulate the permitted increase in salary levels at levels of 3,5 or 10%.
Should the wage regulation be introduced, companies are likely to face various accounting, tax and human resources issues. As consequence of the wage regulation application, payment of a wage penalty (tax non-deductible expense) and reduction of management's salaries may be required. Therefore, it would be advisable to consider in advance the potential impact of certain factors affecting wage regulation calculation, in particular profit and loss and amount and the structure of employees' renumeration.
The information in this newsletter is correct to the best of our knowledge and belief at the time of going to press. Specific advice should be sought, however, before investment and other decisions are made.
For further information contact Mr Frank Walsh on +421 7 5340 545 Email directly on [email protected].
You may also wish to read through related material on the Slovak Republic provided by Arthur Andersen. You can view the entire archive via the Internet on Business Monitor Online (http://www.businessmonitor.co.uk), or via your online provider by entering "Arthur Andersen" and "Business Monitor" as a free text search.
