Last year, the legislator adopted a number of changes which introduced a certain innovation in the field of labour relationships, which came into effect on of 1^st January 2020. Some of these changes are neutral, some for the benefit of employees and imposing additional costs on employers - it is therefore up to everyone to make a statement about their meaningfulness and general benefit. Below are three of them that we consider the most interesting, respectively having potentially the widest impact in terms of the number of employees and employers concerned:

1.            Change in the method of determining the minimum wage (Act No. 375/2019 Coll.)

This year is the last year for which the minimum wage was determined by government regulation (EUR 580 per month, or EUR 3.333 per hour). The level of the minimum wage is interesting for employers, not so much from the point of view of the wage paid to employees - these employees are only a fraction - but especially from the point of view of various bonuses that the Labour Code ties to the minimum wage (e.g. compensation for on-call time, preferential wage rate for work on Saturday and Sunday, night work, working under difficult conditions).

The new mechanism is based on the assumption that the minimum wage will continue to be determined on an annual basis, but always with the agreement of employers´ representatives and employees' representatives. The law establishes the exact mechanism for negotiating this agreement (representatives are designated in the Tripartite Act, i.e. on the one hand, representatives appointed by defined representative employers' associations and, on the other, representative trade union associations). It is also specified when and how the parties to the conciliation should reach an agreement:

a)              negotiations for the following calendar years must start no later than 1^st April;

b)             if an agreement is reached by 15^th July, this agreement shall be notified to the Ministry of Labour, Social Affairs and Family of the Slovak Republic;

c)              if no agreement is reached by 15^th July, the Economic and Social Council of the Slovak Republic shall discuss the proposed amounts by 31^st August.

If no agreement is reached between the representatives and the Economic and Social Council of the Slovak Republic, the amount of the monthly minimum wage for the following calendar year shall be determined by law as 60% of the average monthly nominal wage of an employee in the economy of the Slovak Republic published by the Statistical Office of the Slovak Republic for two years precedes the calendar year for which the amount of the monthly minimum wage is determined (rounded up to the nearest eurocent).

It is interesting to note that if this mechanism were to be applied this year, in the absence of an agreement between representatives and employers, the law would set a monthly minimum wage of € 608 (based on data from the Statistical Office of the Slovak Republic for 2018). Data for 2019 is not yet available; for Q3 2019, the average monthly wage is based on the amount of EUR 1064 (i.e. 60% is EUR 638.4). It is already clear from these theoretical mathematical calculations that there will be a substantial increase in the minimum wage next year. Or to amend legislation.

2.            Contribution to a sports activity of a child (Section 152b of the Labour Code)

Last year, holiday vouchers for employees were introduced into practice. Since some legislators have evaluated this “project” as successful, this year there has been another one – a contribution to the sports activity of a child.

This legal framework seems very similar, with one fundamental difference. While the recreation allowance is compulsory for a certain category of employers (over 49 employees), the employer may, but is not obliged to, provide a new allowance for the child's sporting activity. The employer could be motivated to take this step, in particular, by the fact that even this contribution is not subject to a tax-levy. However, in any consideration before including this contribution in the general bonus schemes, it should be noted that rules should be avoided where its payment/combination with other bonuses would ultimately discriminate between employees who apply for it and who do not (for example, if an employer would set an annual bonus for all employees in the amount of EUR 1,000, including the contribution to a sports activity of a child if a claim is made, then the employee applying the contribution would receive a lower bonus than other employees, and without the reasons for their work).

The conditions for entitlement to request a contribution are:

• the employment relationship of the employee must be continuous for at least 24 months;
• the contribution amounts to 55% of the eligible expenses, but not more than EUR 275 per calendar year in aggregate for all children of the employee (in the case of part-time work, the maximum amount is proportionally reduced).

The employee is obliged to prove the eligible expenses to the employer by submitting the document within 30 days from the date of its issue by an authorized person (sport organization registered in the Register of Legal Entities in Sport), which must include the name and surname of the child, who carries out the sport activity and the period for which such documents applies to. After assessing the fulfillment of the conditions, the employer shall provide the employee with a contribution at the earliest payroll date, unless otherwise agreed.

For the sake of completeness, similar rules also apply to self-employed persons who may claim these amounts as tax-deductible expense/expenditure.

3.           Increase in the basic holiday entitlement for a certain category of employees (Section 103 (2) of the Labour Code)

A staff member who is taking permanent care of a child is entitled to at least five weeks holiday. The amendment of the provisions of Section 103 (2) of the Labour Code including those within the 33-year-old age bracket and older employees who had this entitlement under the previous legislation was subsequently broadened.

Although the legislative change was made by adding just one paragraph to the Labour Code, its briefness may render uncertainties such as:

a)              who is to be considered a child;

b)             what is the “permanent” care;

c)              at which stage the fulfillment of the condition of permanent care (e.g. in relation to birth or divorce) is to be assessed;

and several others, for example related to the practical side - processing of additional personal data of employees and their children and on the need to fulfill all obligations of the employer as a processor under the GDPR.

While the contribution to a sports activity of a child is relatively precisely defined, which children are to be treated (the employee's own child, the child placed in substitute care by the court, the child placed in the custody of the employee before the adoption court decision or another child living with the employee in the common household that has reached the age of 18 in the calendar year for which the employee is applying for the contribution), in the case of increasing the basic holiday entitlement, we are left in the dark, whether the childhood is a legal age (we are most likely, if it comes before the age of 18 (by marriage) or the duration of the maintenance obligation of the parents to the children. This question may seem theoretical, since entitlement to a basic holiday of at least five weeks will also arise when the age of 33 is reached, and younger employees may not often have children as young as this, but they may certainly occur in practice (young mothers and fathers previous marriages, etc.).

Similarly, the law does not answer the question whether it must be a biological child. If not, to what extent must the employee's relationship with him be formalized? In the case of founding of a “new” family, it is indisputable that the partners also take care of the children from the previous relationships if they live together in one household.

It is also interesting to note the issue of shared parenting, however the professional public have opined that in this case, it is the permanent care of both parents.

The truth is that the concepts of childcare/permanent childcare are already used by the Labour Code in certain forms today (e.g. in the case of even working time schedule), but we believe that in such a significant change the legislator should have been more specific, namely at least to the same extent as when setting rules for the contribution to a sports activity of a child. Until the practice resolves the above questions, we recommend employers to provide holiday to this extent to those employees who, on the basis of a declaration, confirm permanent childcare (under the age of 18). In case of any doubt, other documents may also be required from employees (e.g. birth certificate if they do not claim a tax bonus; divorce judgment, etc.).