The New Civil Code (“NCC”) fundamentally changes the regulation of deductions from wages. It seeks to unify and simplify them. This makes employment law more accessible.
The New Civil Code (“NCC”) fundamentally changes the regulation of deductions from wages. It seeks to unify and simplify them. This makes employment law more accessible.
What are deductions from wages for?
The NPL distinguishes between two types of institutes – securing the debt and consolidating the debt. Securing the debt significantly helps its better enforceability – if the debtor fails to pay, the creditor can recover elsewhere, e.g. from the guarantor or the mortgaged property. Securing the debt, on the other hand, does not make the debt itself more enforceable, it just puts more pressure on the debtor to perform (e.g. in the form of a contractual penalty). Wage garnishments stand somewhere in between. If the debtor does not pay, the creditor can turn to the debtor’s paymaster (most often the employer), who then sends a portion of the debtor’s income directly to the creditor by deducting it from the debtor’s wages. However, the debtor must of course have some income.
The agreement on deductions from wages or other income is regulated in the provisions of Sections 2045 to 2047 of the CCC. In addition to this “central” regulation, the Labour Code (“LC”) has been amended so that all agreements on deductions from wages will be concluded under the LC. the “central” regulation will thus also apply in the alternative to employment relationships. This is, after all, the principle on which the relationship between the NLW and the LC is based.
So what specific changes can we expect?
It will now also be possible to make deductions from remuneration from a work performance agreement.
However, a major innovation is the restriction that deductions are made in an amount not exceeding half of the relevant income. This limitation is only relevant if the attachable part of the income determined under the CCA would exceed half of the relevant income (such limitation does not apply to enforcement deductions, of course).
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But what is essential? If the deductions are not made to satisfy the right of the debtor’s own employer directly, the agreement requires the prior consent of the debtor’s employer. This means that the employer cannot be forced into such an agreement and use its administration to conveniently pay off the debt. There is, however, a technical debate as to what ‘prior approval’ means, since there is apparently no reason to invalidate an agreement if the employer only approves it when it is presented to him as a fait accompli.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
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