A reader asks: a higher minimum wage has been established from new year. Do we have to change the employment contracts?
Sandra Kuus, lead counselling lawyer at the Labour Inspectorate responds: Under the Employment Contracts Act, employees and their employers are required to agree on the amount of the wages paid in a written document of the employment contract. Employees need to know how much they are getting paid.
Employers are not permitted to pay wages falling below the minimum wage established by the Government of the Republic. As of 1 January 2022, the monthly minimum wage for full-time employment is 654 euros and the minimum hourly wage is 3.86 euros.
Where a contract states that the employee shall be paid the minimum wage, the employee must know how much that is. A contract might set out the amount of the minimum wage at the time of entry into the contract and, for clarity, state that if the minimum wage changes, the employee shall be remunerated on the basis of the new rate. It is also advisable to indicate where one can find information about the current minimum wage. When the minimum wage changes, employers must notify their employees by, for example, e-mail or by publishing a notice in an information system that is accessible to all employees. It is important for this information to reach the employees. It is not necessary to amend any employment contracts.
Note that when the minimum wage increases, employees are entitled to the new rate even if their employer has not notified them.
The minimum wage will change on 1 January 2022, which means that wages for December 2021 should still be calculated on the basis of the previous minimum rate.
Kristel Abel
Media advisor
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