January 01, 2024
Salary represents a basic right of employees, is a reflection of the value of work and a key factor for satisfaction and motivation in the workplace. In this article we will deal with an overview of the basic elements of salary and salary compensation, in accordance with Articles 90 to 97 of the Croatian Labor Act. Studying this topic will enable a better understanding of the complexity and importance of wage regulation in the employment relationship.
Basic elements of salary:
Salary is legally defined as the receipt of a worker paid by the employer to a worker for the work performed in a given month.
The salary may consist of the following elements:
Basic salary: the basis for calculating the salary, which, as a rule, is fixed and determined by the employment contract.
Additions: supplements are cash receipts of workers that a worker realizes on the basis of a special regulation, collective agreement, labour regulations or employment contracts proportionate to working hours under certain conditions (difficult working conditions, overtime, night work, work on Sundays, work on holidays, etc.) and which he achieves independently of effective work (increase for years of service, etc.), i.e. which, in accordance with the prescribed, established or contracted criteria and level, is achieved depending on the achieved business results and work performance (incentives, etc.)
Other receipts: are workers’ receipts paid by the employer to the worker in cash or in kind on the basis of a collective agreement, labour regulations, employer’s act or employment contract.
Under salary is always considered a salary in a gross amount consisting of the amount for payment to the worker and public benefits from the salary (the so-called Gross 1 salary). The total cost of salary (the so-called gross 2 salary) is the cost of gross 1 salary plus the cost of public benefits on salary in accordance with the regulations on taxes and contributions.
Method of determining salary
The salary must be contracted, determined or prescribed in gross terms.
If the basis and criteria for the payment of wages are not regulated by a collective agreement, an employer who employs at least 20 workers is obliged to determine them by the labour regulations, and the employer who is not obliged to adopt the rulebook or the rulebook on work has not established the basis and criteria, is obliged to contract them with an employment contract concluded with the worker. It is important to emphasize that the basics and criteria for the payment of workers’ salaries cannot be a trade secret. This means that an employer who would like to establish the basis and criteria for salary by the labour regulations would have significantly narrowed room for manoeuvre to contract the secrecy of wages.
Equality of pay between men and women
The employer is obliged to pay equal pay to the worker and the worker for equal work or for work of equal value.
Work of equal value is performed by two persons of different sexes if the work performed by one of them is of the same value as the work performed by the other, taking into account the qualification acquired by a certain level of education and the nature of the work determined according to objective criteria such as the required knowledge, skills, responsibility and autonomy and the conditions in which the work is carried out.
Salary payment
Salary, salary compensation and other cash receipts are calculated and paid to the worker on his transaction account. Public payroll and salary benefits are paid to prescribed payment accounts in a manner and within deadlines in accordance with the regulations on taxes and contributions. Exceptionally, other receipts and receipts based on employment may be paid in cash, but in compliance with tax and contribution regulations.
Salary documents
The employer is obliged, no later than 15 days from the date of payment of salary, salary compensation, severance pay or compensation for unused annual leave, to submit to the worker a calculation from which it is evident that these amounts are determined. An employer who, on the day of maturity, fails to pay the salary, salary compensation, severance pay or compensation for unused annual leave or does not pay them in full shall, by the end of the month in which their payment to the worker is due, submit:
1. calculation in which the total amount of salary, salary compensation, severance pay or salary compensation for unused annual leave will be shown in the prescribed content
2. calculation of the amount of salary, salary compensation, severance pay or salary compensation for unused annual that he was obliged to pay in the prescribed content.
The above-mentioned payrolls are enforcement documents, which means that the employee can enforce the employer on the basis of salary calculation directly through the Financial Agency by blocking the account, or through the court on other assets (real estate, movable property, etc.).
Right to increased salary
For difficult working conditions, overtime and night work, and for work on Sundays, holidays and non-working days established by a special law, the worker is entitled to an increased salary, in the amount and in the manner determined by the collective agreement, labor regulations or employment contract, whereby the increase for each hour of work on Sundays may not be less than 50%
Difficult working conditions are working conditions for which the employer’s risk assessment identifies dangers, harms and efforts that could cause harmful consequences for the safety and health of workers.
If the salary increase is not specifically regulated, then the worker is entitled to the so-called adequate salary. An appropriate increase in salary is considered to be an increase that is regularly paid for such work, and if it is not possible to determine it, the worker exercises the right to an increase determined by the court according to the circumstances of the case.
Salary compensation
For periods in which he does not work for justified reasons determined by law, other regulations, collective agreements, labour regulations or employment contracts, the worker is entitled to salary compensation.
The employee is entitled to salary compensation during the interruption of work that occurred through the fault of the employer or due to other circumstances for which the worker is not responsible.
A worker who refuses to work due to unimplemented prescribed measures of health and safety at work is entitled to salary compensation for the time until the prescribed measures for the protection of health and safety at work are implemented, if during that time he does not perform other appropriate tasks.
The amount of salary compensation is determined by this or other law, other regulations, collective agreement, labor regulations or employment contract, and if not so determined, the worker is entitled to salary compensation in the amount of the average salary earned in the previous three months.
If the worker has not achieved a salary in the previous three months, the amount of the salary compensation shall be determined in relation to the amount of the salary he would have earned in the same period if he had worked.
Prohibition of set-off
The employer may not, without the consent of the employee, collect his claim against the worker by denying the payment of the salary or some part of it, or by denying the payment of the salary compensation or part of the salary compensation. An employee may not give such consent before the claim is made. Therefore, the only way for an employer to compensate for some of his claims against the worker is for the worker to issue written consent after he has received a salary that would serve for such compensation. An exception to this would be the situation when the employer has an enforceable document against the worker and blocks his account, in which case the worker will be forcibly withheld a certain amount on the basis of enforcement.
This article is informative and does not constitute legal advice. For professional legal assistance, the engagement of specialists in the field of labor law is advised.
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