Understanding Wage Supplements and Employment Contracts

Non-Wage Remuneration Examples

Here are three examples of non-wage remuneration:

  • Compensation and work-related supplies (currency breakdown, work clothes, travel expenses, and transportation).
  • Compensation for death by marriage.
  • Salaries received by workers in goods or services other than money (e.g., house, car). These perks may not exceed 30% of the worker’s total remuneration.

Wage Rates

Wage rates are determined in response to:

  • Fixed benefits
  • Variable performances
  • Means of payment: Cash benefits and benefits in kind (goods, rights, or services with monetary value).

Criteria for Determining Salary

Salaries can be determined based on time worked or output:

  • Wages per unit of time: Considers only the time worked, regardless of the amount of work done. This is called a wage if daily and a salary if monthly.
  • Wages per unit of work: Considers the quantity and quality of work performed. This is called piecework.

Main Wage Supplements

Wage supplements are amounts added to the base salary based on the employee and the company. These include:

  • Personal accessories: Based on the worker’s circumstances or special abilities, such as seniority, qualifications, or languages.
  • Accessories for the work done: Related to the type of work or achieving specific quantity or quality levels. This includes supplements for job characteristics (e.g., toxicity, night shifts) and performance-based bonuses.
  • Complements according to the company’s results: Designed to involve employees in the company’s success and reward dedication and professionalism.

Extra Pay

Workers are entitled to at least two extraordinary bonuses per year, typically one at Christmas and another determined by agreement (usually during summer). The amount and payment schedule are determined through agreements, which also specify whether these payments include social security contributions.

Preferential Wage Claims

When an employer has various debts, wage debts are prioritized over other debts.

FOGASA Guaranteed Salary

FOGASA pays unpaid wages if the employer cannot. The maximum amount payable is twice the daily minimum wage (excluding extra payments) multiplied by the number of outstanding days, up to a maximum of 120 days. If the minimum wage is €500 and a worker is owed €2480, the attachable portion is €1980 (€2480 – €500).

Social Security Contributions

Required documentation for social security contributions includes:

  • Contribution Bulletin (Tc-1)
  • Short Trading Bulletin (Tc-1) (for companies with only one worker)
  • Nominal Value of Workers (Tc-2)
  • Nominal Value of Workers Entitled to Bonuses or Quota Reductions (Tc-2/1)

The General Treasury of the Social Security may authorize electronic submission of Tc-2 and Tc-2/1.

Substantial Modification of the Employment Contract

While employers can modify working conditions, certain conditions require specific reasons for change. These are considered substantial changes and can be due to:

  • Economic reasons: Losses or profit goals.
  • Technical reasons: Introduction of new technologies.
  • Organizational reasons: New work processes.
  • Production reasons: New production lines, products, or services.

These changes aim to improve the company’s situation through better resource organization.

Individual vs. Collective Changes

A substantial change is individual if it affects only one worker or a small number (around 10% of the workforce). It is collective if it affects more than 10% of the workforce, even if the changes occur over 90 days.