Determination of wages by wage assessment

Quick overview

• A payroll is a way for an employer to determine wages unilaterally.

• You don’t have to sign it, but it must be delivered to you.

• Your employer can change it without your consent.

• From 2025, there is no longer a guaranteed private sector wage.

• Minimum wage and non-discrimination still apply.

Not sure if your employer has rightly reduced your pay? Have your situation checked by a solicitor.

How can I determine my pay?

Let’s first summarize what options an employer has for determining wages. There are four in total:

• Anchoring it in the employment contract – the contract is a bilateral agreement, and again, it takes bilateral negotiation and the consent of both parties to change it, including the wage provision.
• Using a collective agreement – in this case, the change in wage is negotiated with the employer by the trade union.
• By means of a wage assessment – here, although you have an employment contract, the wage is set outside it, the change is determined unilaterally by the employer.
• By means of an internal regulation.

What is it and what does a payroll look like?

A wage slip is a document referred to in an employment contract that unilaterally sets the amount of wages to be paid by the employer.
Importantly, the exact form of the pay slip is not specified. This is up to the employer. However, the Labour Code sets limits on what the wage statement must contain. According to the Code, it should not lack the following information:

• to whom the pay slip relates – i.e. the name and surname, or other personal data of the employee,
• the amount of the salary,
• the date of issue,
• the method of remuneration,
• the date and place of payment of the salary (if not included in the employment contract),
• the signature of the employer or the employee designated by the employer,
• it may also include a place for the employee’s signature, but the signature itself shall not affect its validity.

The amount of wages stated in the wage (or salary) statement is, of course, the gross wage. It is therefore not the amount that lands in your bank account each month. It is less social security and health insurance contributions and income tax, which may be reduced by tax credits.

This gives you a net salary, but this may vary slightly from month to month (for example, if the employee falls ill, etc.).

Are you missing any items on your pay slip? We can check it for you.

Tip: The term “payroll” is sometimes confused with “pay slip“. However, these are completely different things. A pay slip is a document that is filed by the employer for each employee, containing the totals of all the data for the tax year and the monthly tax bonuses paid. Each year, it is then used to record the tax calculation and the annual settlement of advances and tax credits made for the previous year.

What other requirements must be met?

According to the Labour Code, the notice must be delivered to the employee (in person, electronically or by post) no later than the first day of work (unless the wage is fixed by contract). It must be delivered by hand and must be in writing and in at least two copies.

Should there be a change in the facts set out in the pay slip, the employer must notify the employee in writing no later than the day on which the change takes effect.

From 2025, it is possible to deliver the pay slip electronically via the employer’s internal systems, for example by e-mail.

Restrictions on unilateral pay changes

The employer must not act completely arbitrarily. If it wants to reduce an employee’s pay, it must comply with the principles relating to the minimum wage.

We have dealt with a case where an employer reduced the pay of an entire group of employees by 15%. In one case, this was indirect discrimination because it only affected parents of young children.

If your employer has cut your pay and you are unsure whether they have done the right thing, we recommend a quick legal review. In practice, we deal with situations where an employer reduces pay “subtly” by a new pay assessment. What employees fail to realise is that the change may be against the law – typically if it is discriminatory or not justified.

Tip: With effect from 1 August 2024, the existing guaranteed salary legislation has been abolished and replaced by the new concept of guaranteed salary. The guaranteed wage is thus abolished for all professions in the private sector, where only the statutory minimum wage will now apply. It must also not discriminate against the employee in any way.

Advantages and disadvantages of the payroll

It has to be said that the disadvantages of this method of setting wages are indeed predominant. As can be seen from the above overview, if you had a wage set directly in your contract and your employer wanted to change it, he or she would have to agree with you and you would have to confirm the change with your signature.

However, this does not apply in the case of a wage assessment and your boss can reduce your pay (and of course increase it) without your consent.

Even if you refuse to accept the new pay slip, it is valid. Your employer should, of course, try to deliver it to you and, if necessary, prove it.

For employers, the advantages of negotiating pay in this way are mainly organisational and administrative. In large companies, it is easier to increase or decrease pay in bulk, without having to go round all the employees individually and negotiate with them, even if it is a pay rise.

In addition, the employer has a relatively free hand in reducing wages in the workplace. However, some legal limits do apply.

An example from our practice

Ms Zdena had a long-standing disagreement with her boss. When she refused his sexual advances several times, his behaviour changed. He started giving her more and more tasks and eventually came up with a pay cut through a change in the pay scale.

Ms. Zdena contacted us for help. We sent her employer a pre-suit notice to cease and desist from discriminatory behaviour. No one else in the workplace had their wages reduced at the time, and on the contrary, colleagues were receiving higher wages for the same work. This is a clear case of wage discrimination.

Our appeal helped Zdenka to return to the same level of income and to make up the wages for the past months. This gave her financial security for the time she was looking for a new job, as she no longer wanted to stay in her old one.

In the above case, it may have been a revenge against the employee, but it was also a way to get her out of the workplace. Unfortunately, this was eventually done, but not under the conditions the employer wanted to set. It is important to know that the employer’s powers have legal limits.

There are not many advantages of the wage assessment, but one could be found. It concerns extra pay for weekend work, public holidays and night work. These cannot be included in the wage set by the wage assessment and every hour worked in one of these extraordinary regimes should be remunerated separately.

In contrast, the employment contract may (but need not) already take account of and include these non-standard modes.

The same principle applies to overtime work, which must be remunerated separately in the payroll. However, if the wage is agreed in an employment or other contract (i.e. it must be a bilateral legal transaction), up to 150 hours of overtime per year may be included in the wage.

Salary schedule for civil servants

In the public sector we also encounter an assessment, but not a wage assessment, but a salary assessment. The remuneration of employees in the public sector is called salary. A pay slip is also a unilateral legal act, which is very similar to a salary slip. However, there are some differences in the determination of the salary of civil servants:

• For civil servants, there is no other way of determining remuneration (for example, by negotiating it directly in a contract) than the salary schedule.
• Salary is governed by salary scales, which are reflected in the salary scale itself. The employer is obliged to indicate in the salary schedule the grade and step to which the employee is assigned and the amount of the salary scale and other components of the salary granted on a monthly basis.
• Changes to salary scales may thus lead to a mass increase, but also to an across-the-board reduction in the salaries of civil servants.

An available attorney advises:

If your employer has reduced your wages through a wage assessment, check how the wage assessment is referenced in the employment contract.

The wage slip should not be part of the employment contract, either directly in the body of the contract or as an annex, e.g. “Annex 1 to this employment contract, which contains the wage slip, is an integral part of this employment contract”. In such a case, the employer has made the mistake of essentially negotiating the wage directly as part of the contract, which is a case where both parties must agree to the amendment.

If you have a similar clause in your contract, you have a good chance of success in claiming the “rest of the wages”. If you are unsure of the wording, please contact us and we will advise you.

Summary

A wage slip is a unilateral decision by an employer to determine the amount of an employee’s wages. Unlike an employment contract, it is not part of the contract and the employer can unilaterally change it if it complies with the legal conditions. The wage set by the wage assessment must not be lower than the minimum wage and, in the case of certain professions, must also meet the conditions of the guaranteed wage. The employer must inform the employee of the change to the wage assessment no later than the day on which the change takes effect. Understanding the rules of the wage assessment helps employees to better protect their rights and effectively resolve any disputes over the amount of their wages.