Employers have the right to demand regular or irregular payments from their employees, which are usually made by means of deductions from employees’ pay. Frequent causes for payroll deductions are:
- providing meal vouchers
- reimbursement of accommodation expenses
- using company phones for private purposes
- using company vehicles for private purposes; the fuel that is used is then replaced by the employee
- employee contributions to Multisport cards
- and deductions resulting from compensation for damage caused by employees or company loans to employees.
Employers may implement such payroll deductions to their own advantage on the basis of a payroll
deduction agreement pursuant to Section 2045 of Act No. 89/2012 Coll., Civil Code, as amended. The agreement must be in writing and may be entered into independently or as part of an employment contract.
Pursuant to Section 148(2) of the Labour Code, the set payroll deductions based on the payroll deduction agreement are placed on the same level as attachments of earnings.
The manner of their execution is essentially the same and their rate is equal to that stated in Sections 277 to 279 of Act No. 99/1963 Coll., the Code of Civil Procedure. This act also details the methods for calculating the base amount of attachments of earnings which may not be deducted from an employee’s monthly pay during the enforcement of orders for the attachment of earnings. The distribution of payroll deductions follows the rules of precedence and ranking.
On the basis of the information mentioned above, it is apparent that employers do not always have a 100% chance of satisfying their accounts receivable. They might not receive what they are owed if the employee terminates his/her employment, his/her income is not high enough for any payroll deductions to be executed, or an execution order with a higher ranking has already been imposed on his/her pay.
Do you need consultation on your employees’ payroll administration? Contact us and let us bear the burden. We would be glad to assist you.