Amendment to the Protection of Wages Law – New Requirements

The Protection of Wages Law of 2007 as amended, stipulates the acceptable means of wage payment and introduces new obligations to employers.

Wages – Acceptable Means of Payment

The Law requires all employers to pay wages either through (i) payments to a bank account or a payment account indicated by the employee, which includes, but is not limited to, payment through electronic means or through payment service providers; or (ii) bank cheques issued in the name of the employee. It is further noted that, exceptionally, the Law allows payments in cash only in the event that:

• The employee’s bank account or payment account opening application is pending and only for a maximum period of four months following the employment’s commencement date; or
• The employee’s application for a bank account or payment account opening has been rejected for any reason, always provided that the employer has provided sufficient evidence of such rejection to the Director of the Department of Labour Relations; or
• The parties have entered into a collective or other written agreement specifically providing that such payment would be effected in cash on a weekly basis.

Weekly or Monthly Payslips

The Law requires all employers to provide their employees with a copy of their payslip on a weekly or monthly basis within five working days from the date of the wage payment. Employers should ensure that they issue payslips containing, amongst others, the following information:

• General information for the employer and the employee (Full name, Address, ID/Registration Number, Employee’s social insurance number and employer’s registration number)
• Date of payment
• Period of payment
• Payment details (basic salary and weekly hours of work, overtime remuneration, hours of overtime work and method of calculation, any other payments)
• Employee’s contributions to the Social Insurance Fund, General Health System or other
• Employer’s contributions to the Social Insurance Fund, Social Cohesion Fund, Redundancy Fund, Human Resources Development Fund, General Health System, or other
• Any other applicable information e.g. 13^th or 14^th salary, travel expenses, Provident Fund etc. 

Recordkeeping Requirements

Pursuant to the Law, employers must keep updated records for each employee, and provide copies thereof upon request to an inspector nominated by the Ministry of Labour and Social Insurance, in relation to their gross and net salary, including any deductions made to the salary as well as the reasons behind any such deductions. These records must be kept for a total period not exceeding six years and can only be used and processed pursuant to the provisions of the GDPR, the Law on the Protection of Natural Persons with regard to the Processing of Personal Data and for the Free Movement of such Data as well as any other applicable law or regulation.

Salary Deductions

The Law stipulates that no deductions on salaries can be effected unless they concern:

• Deductions provided for by law or regulation;
• Deductions pursuant to pension fund, provident fund and medical care fund regulations;
• Deductions pursuant to a court order;
• Compensation due to damage intentionally caused or due to gross negligence shown by the employee;
• Deductions provided for in a collective agreement or general agreement between employer organisations and employee representatives, if applicable; or
• Other deductions, provided that the employee’s consent was given in writing and in a signed form.

It is further noted that pursuant to the Law, any deductions on salaries are limited to the extent that the employee is able to maintain themselves and their family.

Offences and penalties

The penalties introduced through the Law for non compliance with its provisions are rigorous. Specifically, an employer who violates the provisions of the Law is guilty of an offense and, upon conviction, is subject to a prison sentence not exceeding six (6) months or a fine not exceeding fifteen thousand euros (€15,000), or both. Additionally, Courts may, upon the conviction of the employer, issue an order for the payment of the amount owed to the employee. Similar provisions are provided for cases of abusive recourse to insolvency proceedings to deprive employees of their rights, as well as for offences related to obstruction of procedures as set out in the Law.

 

By Evi Chalkidi

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