Payout: everything to know about it

What does payroll mean?

Employers sometimes try various tricks to save money on employees or at least delay payments as long as possible. A similar effort was made by Mr Aleš’s employer, who wanted to arrange for occasional bi-monthly wage payments and to enshrine this option in the employment contract. However, such an effort is illegal. The Labour Code stipulates that wages are payable after the performance of work, and no later than in the calendar month following the month in which the employee became entitled to wages or any component thereof. This period may be adjusted, in the case of wages (i.e. not salary). However, it may only be shortened and not extended. Therefore, if you do certain work in July, it must be paid by the end of August at the latest. This is a statutory deadline. At the same time, however, the employer’s contract or internal regulations may contain an obligation to send the salary by a certain date in the month (typically, for example, by the 15th of the following month). Thus, in this case, the pay date is usually different from the due date of the wages and is set at an earlier date.

What if my employer doesn’t pay me on time?

The Labour Code has quite significant consequences associated with late payment of wages. If your employer fails to payyou your wages even within fifteen days after they are due, you may immediately terminate your employment relationship with your employer and claim wage compensation for the period of notice. Again, however, it should be stressed that the time limit does not start on the date of payment of the wages, but only on the later date on which they are due.

The employee’s protection here is that, on the one hand, he does not lose his money (or at least is legally entitled to it, the reality can sometimes be more complicated), but on the other hand, he does not have to remain in an employment relationship in which he is not guaranteed regular pay. The employee cannot fairly be required to continue to work for such an employer. The employee has the right to leave his employment immediately even if the employer sends his salary on the 16th day after it is due. Payment does not extinguish the employee’s right to quit.

The only exception is where the employer has failed to pay the employee’s wages or salary, wage or salary replacement or any part thereof solely as a result of an error, mistake or other obvious miscalculation or payment. In such a case, the immediate cancellation in question would be invalid. This is the conclusion reached by the Supreme Court in its decision.

Example:

In the above-mentioned case, where the pay date of 31 August 2024 has come due, the employer will be in default on 1 September 2024 if it fails to pay the wages. If he sends the money to his employee’s account on 27 August, even though he promised in his employment contract that the pay date would be no later than the 10th of the following month, this does not entitle the employee to take drastic action. However, if he sends the money only on 20 September, then the employee has the right to leave and still claim compensation for the two months in which the notice period would have lasted. The employee is also entitled to interest on late payment at the rate set by the government by regulation (unless the parties agree on the amount of interest on late payment).

Failure to pay wages on time is also an offence under the Labour Inspection Act. A fine of up to CZK 2,000,000 may be imposed.

Payment of wages on account or in cash?

You may be surprised to learn that the basic rule for payment of wages is that they are paid during working hours and at the workplace, unless other times and places have been agreed.

However, it also recognises that an employer with complex operating conditions for the payment of wages or salary, if payment would be difficult or impracticable, may send the wages or salary to the employee at his or her own expense and risk, and so that it is available to the employee no later than the date fixed for payment. The law thus, of course, allows for the now quite typical sending of wages to a bank accountor, less frequently, by post.

In practice, it does not really matter how complex the operating conditions are. Even if an employer has only eight employees who meet every day in two offices and therefore there is nothing so difficult about sending pay to the workplace, no one will criticise him if he sends his employees’ remuneration by bank transfer.

But the important thing is that he should make such arrangements with them in advance. If, in theory, the employee does not have an account, the employer cannot force him to do so. However, he can send the money to them by post.

Pay slip: what is it and what do I find on it?

A payslip, sometimes also called a ‘pay slip’, is a written confirmation of the different parts of a wage or salary. It also shows deductions and deductions.

What must it contain?

• the employee’s name and surname
• the name of your employer
• the period for which the wages are paid (month and year),
• what the rate of pay is – i.e. the wage you have stated in your contract of employment,
• what your gross salary is – i.e. the salary including variable components (holiday pay, sick pay, etc.).
• the non-taxable part of the tax base,
• days of leave for the current and previous year, as well as days taken and days remaining,
• days worked, including public holidays,
• hours worked,
• bonuses, remuneration and personal assessment,
• compensation for taking holidays and for night shifts, on-call, weekends and public holidays,
• health insurance and social security contributions paid by the employer,
• health insurance and social security contributions paid by the employee,
• advance payment of payroll tax,
• amount to be paid.

What about wages during holidays?

A special provision on payment of wages applies during the period when the employee is on leave. This is because the employer is obliged to pay the employee the wages payable during the holiday period before the employee takes the holiday, if the payment date falls during the holiday period, unless the employee agrees on a different payment date. The law also provides for situations where the payroll technique would not allow such a procedure. In such a case, the employer is obliged to pay the employee a reasonable advance and the remaining part of the wages must be paid to the employee no later than the next regular pay date following the holiday.

Even this provision is not entirely dogmatic and the law allows for the possibility that the above procedure is done only at the express request of the employee. However, in most workplaces, the principle is that the employee must expressly request an exception.