Practice Area Articles
By Tomas Ryber and Peter Fedor
Back to International Employment Law
KEY DEVELOPMENTS FOR 2021
Modernizing changes to work at home and telework
The COVID‑19 pandemic forced a significant number of employers to either allow or (if possible) require their employees to perform their job duties from their homes (or other places outside the originally agreed workplace). Even though some changes were already introduced back in 2020, the Slovak Government only recently decided to substantially update and modernise the existing legal framework on work‑at‑home and telework reflecting upon many legal and practical issues, which due to the pandemic, became even more eminent and concerning (e.g., in relation to employer's H&S duties, distribution of working time, or in relation to so called "mobile workers" or "digital nomads" working from various different places). The amendment to the respective laws is scheduled to come into force on 1 March 2021.
Meal vouchers as a voluntary option
Under the existing legislation, employers, who do not provide their employees with mandatory hot meals directly at the workplace or nearby catering facilities of other employers, are required to give them meal vouchers in the amount set by law (whereas employers are required to partially contribute a certain pre‑set amount of a voucher's value). Employees can then use the vouchers to pay for lunch in restaurants or buy food in shops, for example. With effect from 1 March 2021, the Slovak Government changed the mandatory nature of meal vouchers and employees can now individually decide whether they want to keep receiving the meal vouchers or instead obtain the employer's financial contribution directly as a payment.
Social benefits administered in 2021
Despite the negative consequences of the COVID‑19 pandemic, several changes in Slovak labour and social security law have been adopted or announced, including:
- an increase in the minimum monthly wage to EUR 623 gross as of 1 January 2021;
- mandatory surcharges for work on Saturday, Sunday and public holiday were changed to fixed amounts as of 1 January 2021 (formerly set as a percentage of minimum wage);
- a new social contribution called "pregnancy allowance" in the approx. amount of EUR 210 monthly was applicable as of 1 January 2021; and
- a permanent "kurzarbeit" scheme (i.e., the short‑time work scheme allowing employers to temporarily reduce working time of their employees, whereas the state would participate in compensation for the loss of the employees' income due to the reduced working time via a state allowance provided from the state social security scheme) was introduced by the Slovak Government (planned to be effective from 1 January 2022).
KEY DEVELOPMENTS FOR 2020
Vacation entitlement for young parents
As of 1 January 2020, all employees who have permanent childcare responsibilities are entitled to five weeks of paid leave if they are ‘continuously taking care of a child'. This entitlement was previously only available to employees over the age of 33, and employees who did not meet the age limit were generally only entitled to four weeks of paid holiday, regardless of their childcare responsibilities (although specific exemptions applied).
Introduction of the sports activities allowance
On 1 January 2020, a new type of benefit - a sport activity allowance - was introduced to give employers the opportunity to contribute to the costs of employees' children's sports activities. The structure, concept and amount of the sports activities allowance is similar to the existing recreation allowance (i.e., the allowance will only be granted to an employee who has been employed for a continuous period of at least two years, the employee must apply for the allowance and it is limited to 55% of the eligible expenditure but is capped at EUR 275 per employee per calendar year), but the main difference is that the sport activity allowance is a voluntary benefit. The alleged motivation for employers to provide this new benefit to employees will be the favourable tax treatment of the benefit.
Changes in cross-border posting of workers
An amendment to the legal regulation of the cross-border posting of employees came into effect on 30 July 2020 and distinguishes between a short-term posting lasting for a maximum of 12 months (or 18 months if the extension of the short-term posting and its reasons are communicated to the National Labour Inspectorate in advance) and a long-term posting lasting longer than 12 or 18 months. Further to the division of postings into short-term and long-term postings, the amendment also defines rules for the calculation of the duration of a posting and has introduced the inclusion of 'successive postings' in the duration of a posting. Another change introduced by the amendment is that, in the case of temporary cross-border posting of a worker to an employer in the territory of Slovak Republic, the employer may post the posted worker to perform work for another employer in another EU Member State, under certain conditions. Further, the amendment has extended the so-called core terms and conditions of employment, that is, the obligatory provisions of Slovak labour law that must apply to the employment relationship of a worker posted to perform work in the territory of the Slovak Republic. For example, the core terms and conditions of employment have now been extended to allow reimbursement of expenditure to cover travel expenses and to include the conditions of accommodation provided by an employer.
New rules regarding remote work
Until late March 2020, employers were not legally authorised to unilaterally order a 'home office', or ask an employee to work remotely if the employee's employment contract did not contain a provision allowing the employer to do so. However, in light of the COVID-19 outbreak, the home office regime was naturally considered as an important mechanism to ensure the health & safety of employees, and the Slovak Labour Code has now been amended to allow employers to order employees to work from home, provided that the work they are employed to do can be performed from home. Similarly, employees are also entitled to demand to work from home (and the employer must permit it), unless there are serious operational reasons not enabling such work to be carried out from home. Although these new rules regarding remote working were intended to be temporary (i.e., applicable only during the COVID-19 pandemic and two months after it), their permanent introduction into Slovak legal order is currently being discussed.
Introduction of specific state-subsidized "Kurzarbeit" scheme
The Slovak Government has introduced a specific state-subsidized "Kurzarbeit" scheme, pursuant to which employers will be entitled to receive a state subsidy if they cannot assign work to their employees, or there has been a drop in activities as a result of the COVID-19 pandemic. Under the scheme, employees' compensation will be reduced to 80% of their average earnings (from the original 100%), without the need to obtain employees' consent or consent from the employees' representatives, and the State will reimburse 80% of employees' salaries to employers whose operations have closed, or whose revenues have fallen by a set percentage (even it not mandatorily closed).
Planned abolishment of mandatory meal vouchers
In order to improve the business environment in Slovakia, the new Slovak Government has announced a change to the current legislation regarding the provision of mandatory meal vouchers to employees in Slovakia (which is generally applicable to employers who cannot provide employees with one hot meal and a drink at the workplace or a nearby catering facility). It is envisaged that meal vouchers should be provided on a voluntary basis, whereas a monetary compensation in the same amount should be the legal alternative. Further details have not yet been published.
KEY DEVELOPMENTS FOR 2019
New obligation to provide recreation contributions for employees
A new obligation to provide “recreation contributions” to be spent on holidays and other "recreation" activities in Slovakia came into force on 1 January 2019. The contribution shall be provided at the request of the employee. The employee must have a continuous period of at least 24 months service with the employer (as of the start of the recreation) to make the request. The contribution shall be mandatory for companies employing 50 or more employees. Companies with less than 50 employees may offer this on a voluntary basis. The contribution is 55% of eligible expenses (as defined in the Labour Code) up to a maximum of EUR 275 per calendar year. The contribution will be exempt from income tax.
Proposed changes to whistleblowing regulations
The proposal for a new Act on Whistleblowing has been published. Protection of employee-whistleblowers is being significantly extended by several new mechanisms such as the establishment of an independent Whistleblowing Office, material extension of existing definitions and extension of protective periods. Employers with 50 or more employees will be required to adopt appropriate technical and organizational measures to ensure and demonstrate their compliance with the Whistleblowing Act and internal whistleblowing policies. Such employers will be also be explicitly required to uphold the independence of responsible persons, provide them with any necessary cooperation and continuously ensure their qualification in this respect.
The wording of the new Whistleblowing Act is still subject to legislative procedure. The regulation is however expected to enter into force in Spring 2019.
Announced social benefits coming in 2019
Due to the recent macro-economic growth in Slovakia, the following remuneration aspects are changing:
- an increase in the minimum wage to EUR 520 gross as of 1 January 2019;
- an increase in the surcharge for working at night (40% of minimum wage);
- an increase in the surcharge for work during public holidays (100% of average earnings) as of 1 May 2019; and
- an increase in the surcharges for working on Saturdays (50% of minimum wage) and Sundays (100% of minimum wage) as of 1 May 2019.
KEY DEVELOPMENTS FOR 2018
Industry-Level Collective Agreements
As of 1 September 2017, Higher Level Collective Agreements (HCAs) will be automatically considered as representative and thus binding on other employers in the same industry (with certain exemptions), who had not originally committed to the HCA. The Ministry of Labour will no longer decide if it will extend an HCA.
Liability of Entrepreneurs for Illegal Employment Conducted by Third Parties
Pursuant to amendments to the Act on Illegal Employment, entrepreneurs (whether a corporate entity or natural person) are not allowed to accept any work or service which is delivered or provided by a third party employing individuals illegally. In practice, this means that a company which orders certain services or works (e.g. uses the services of a temporary employment agency) must verify whether the employees of its supplier/assigned workers perform illegal work; otherwise the company may be subject to sanctions up to EUR 200.000.
Announced Social Benefits Coming in 2018/2019
Due to the recent macroeconomic growth in Slovakia, the Slovak Government has announced several upcoming changes in Slovak labour and social law including:
- an increase in the minimum wage to EUR 480 gross as of 1 January 2018;
- an increase in the surcharge for working night or during public holidays;
- the introduction of surcharges for working on Saturdays and Sundays; and
- the introduction of parental leave.