Salary

The employment contract sets out the salary to be paid to the employee in consideration of the work he/she undertakes for the employer. The amount of the salary is usually only set for the commencement of the employment relationship. The employment contract sets out the salary payment period, the method of payment, salary grouping, salary tables, salary basis and different bonuses payable for the work in question.

The salary must generally be paid in the currency of the country where work is undertaken.

Salary shall be paid to the employee in cash or, if so agreed, to a financial institution designated by the employee.

According to the Employment Contracts Act, the salary must paid depending on the pay rate at least twice a month or once a month [Payday and Pay Period].

The Employment Contracts Act does not regulate the amount of the salary or other compensation. It is solely determined on the basis of collective bargaining agreements and the employment contract. Collective bargaining agreements usually provide separate payment tables for persons fully capable of work and above the age of 18, persons under the age of 18, students, trainees and persons with impaired capacity to work. The salary may not be less than that provided for in the collective bargaining agreement but the parties are free to negotiate for a greater salary.

The employer and employee are free to agree on the basis on which the salary is to be determined. This right is, however, restricted by certain collective bargaining agreements. The salary is usually determined on the basis of the time worked or on a performance basis (performance pay). In addition, the parties may negotiate for fringe benefits such as lunch allowances, company-paid telephones, company cars lunch and payment based on results.

For more information, see further [Salary Payment]⁠.