Rights and obligations in connection with the settlement of salaries and the payment of remuneration

Rechte und Pflichten

Correct payroll accounting

There are a number of rights and obligations to be observed when it comes to correct payroll accounting. Payroll accounting documents all relevant information on wages and deductions. The continued payment of wages ensures that employees continue to be paid in the event of illness or absence from work. Here are some important aspects:

  • Contents of payroll accounting
  • Deductions and taxes
  • Holiday and public holiday pay
  • Continued payment in the event of illness and absence from work
  • Special payments such as Christmas and holiday bonuses
  • Rights in the event of incorrect or incomplete payroll accounting

Employers' rights and obligations with regard to payroll accounting

Employers have a variety of rights and obligations vis-à-vis their employees in relation to payroll accounting. Here are the most important aspects in detail:

1. Contents of the payroll:

Employers are obliged to provide employees with a clear and understandable payslip. This should contain the following information:

  • Name and address of the employer and employee.
  • Payroll period (e.g. month, quarter).
  • Gross wage: This is the wage earned by the employee before deductions.
  • Deductions: This includes taxes, social security contributions and any other deductions (e.g. pension insurance, health insurance).
  • Net income: This is the amount the employee receives after all deductions have been made.
  • Information on overtime, holiday days and other variable remuneration.
  • If applicable, details of special payments such as Christmas and holiday bonuses.

2. Deductions and taxes:

Employers are obliged to withhold the correct taxes and social security contributions from employees’ salaries and pay them to the appropriate authorities. This includes income tax, solidarity surcharge, church tax and social security contributions (unemployment insurance, pension insurance, health insurance and care insurance).

3. Allowances for holidays:

Employers must ensure that legal provisions regarding entitlement to leave and compensation on public holidays are complied with. This may vary from country to country, so it is important to follow local laws.

4. continued payment of wages in the event of illness and absence from work:

Employers are often obliged to continue to pay employees in the event of sickness or other absences from work (e.g. due to absence from work as a result of natural disasters). The exact conditions and duration may vary depending on the country and employment contract.

5. Special payments such as Christmas and holiday allowances:

Employers may offer additional benefits such as Christmas and holiday allowances. These should be clearly set out in employment contracts or collective agreements in order to avoid misunderstandings.

6. Rights in the event of incorrect or incomplete payroll:

Employees have the right to a correct and understandable payroll. If they notice any errors or inconsistencies, they should alert the employer. The employer is required to correct errors and issue an updated statement.

In some countries, workers have the right to view payroll statements for the past years to ensure that all payments were correct.

In the event of serious problems or inconsistencies, workers may turn to the relevant authorities or labour courts.It is important to note that the exact rights and obligations of employers and workers with regard to payroll accounting depend heavily on the respective national laws and employment contracts. Employers should always familiarise themselves with the regulations in force in their country and ensure that they comply with them properly to avoid legal problems.

Salary increases, employee share plans and tax-free employee benefits

In addition to the classic salary increase for employees, there are various employer benefits that serve to retain employees but also to attract employees in times of a shortage of skilled labour. These employer benefits include, for example, gifts, vouchers or a company pension scheme. You would like to support your employees with a job ticket or a Job bike. It is important that you always keep an eye on the latest changes to the law and that you as an employer are regularly informed of any changes.

Employee share programmes are another way of motivating your employees and creating close ties with your company. Here, employees participate in the company’s capital or profits. There are various forms of employee share programmes, e.g., in the form of shares or employee Stock Option Plans (ESOPs). If no direct participation in the company is desired, there is the option of virtual employee stock options (VSOP) – this is a frequently used instrument, especially for start-ups.

Lohnworx will be happy to advise you on this topic.

Overall, the topic of salary increases, employer tax benefits and employee share plan as well as the corresponding legal and tax aspects are important factors for employees and employers. Particularly in times of a shortage of skilled labour, attractive remuneration packages are an important tool for employee retention, but also for attracting new employees. It is advisable for employers to inform themselves about the applicable legal provisions and, if necessary, to seek expert advice to make the best decisions in connection with salary payments and salary developments.

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Minimum wage and collective agreements: rights and obligations

The minimum wage is a statutory hourly wage guaranteed to workers as the lowest minimum wage. The level of the minimum wage and its scope are two important aspects that need to be taken into account when implementing it. The exact amount of the minimum wage is regularly reviewed and adjusted to ensure that it reflects current economic conditions and provides workers with a decent income.

In addition, there are various exceptions and special arrangements that can affect the scope of the minimum wage. For example, certain occupational groups or sectors may be exempted from the minimum wage obligation. These exceptions may apply due to specific circumstances or special arrangements.

Compliance with the minimum wage is monitored, among other things, by the Financial Control Undeclared Labour Department of Customs. They regularly check that employers are paying the minimum wage correctly and complying with the legal provisions. Various proceedings can be initiated for minimum wage violations to punish non-compliance and ensure that workers receive their lawful wages. This includes possible fines or other sanctions for employers who fail to meet the minimum wage.

Collective agreements also play an important role in terms of wage agreements and working conditions. They are negotiated between employers’ associations and trade unions and have a binding effect on the collective-linked companies and employees. Collective agreements may include wage provisions that go beyond the minimum wage to ensure that workers are paid fairly and have decent working conditions.

In the context of collective agreements, workers have certain rights and entitlements. These may include, but are not limited to, rules on working hours, leave entitlements, notice periods and other labour law provisions. Collective agreements provide workers with a degree of protection and allow them to claim their working conditions on the basis of these agreements.

Overall, the minimum wage and collective agreements play an essential role in ensuring fair working conditions and decent wages for workers. They provide protection and rights and help reduce social inequalities and create a more equitable world of work. Compliance with the minimum wage and the provisions of collective agreements are key factors in ensuring a fair and equitable working environment.

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