Paying in cash is a thing of the past

As of 1 January 2016, several changes have been implemented in connection with the Act on Tackling Sham Arrangements. This law aims, among other things, to ensure that employee remuneration complies with legal regulations, CLA agreements, and the individual employment contract.

Right to statutory minimum salary
Every employee is entitled to at least the statutory minimum salary. A higher salary is, of course, possible. For example, by agreeing on a higher salary in an employment contract, or through wages included in the applicable CLA. In practice, it appears that some employees are still underpaid.

The new law provides rules regarding the clarification of payslip requirements and the obligation to pay the statutory minimum salary via bank transfer.

Payment of wages via bank transfer
Usually, your wages are deposited into your bank account. However, it still often occurs that employees are paid in cash. From 1 January 2016, employers are required to pay at least the net amount of the statutory minimum salary via bank transfer. The net salary is understood as the gross amount legally required, minus mandatory and permitted deductions such as income tax, pension contributions, and employee insurance premiums.

Do you earn more than the statutory minimum salary? Then the amount above that may be paid in cash!

Payslip
It appears that payslips are not always provided, or they are very unclear and do not contain all the necessary information. It is possible that on paper you may receive the statutory minimum salary, but that amount may also include, for example, travel expenses or your holiday entitlements. Therefore, it is mandatory that all amounts comprising the salary must be specified.

The Inspectorate SZW (Social Affairs and Employment) monitors compliance with the above rules. If the employer does not adhere to, for example, payment via bank transfer, they may incur a fine.