Have you ever wondered why some employers state your pay directly in the employment contract, while others determine it in a separate document called a pay sheet (mzdový výměr)?
The explanation lies in Czech legislation, which sets different rules for these two documents.
Pay Agreed in Employment Contract
An employment contract is a bilateral legal act based on the voluntary and mutual expression of an employee's and an employer's volition to establish an employment relationship. This act is also based on the equality of both parties, which means the contract can be concluded, modified or terminated provided both parties agree to it. Therefore, the pay stated in an employment contract can only be modified by an amendment to the corresponding contract and by mutual agreement of the parties.
Pay Determined by Pay Sheet
Unlike an employment contract, a pay sheet is a unilateral legal act where the consent of both parties is not necessary. Therefore, an employer can increase or decrease their employees’ pay as they see fit, which is convenient when they need to, for example, reduce wage costs, or conversely, when implementing a general wage increase by x%. Furthermore, this pay adjustment method also saves employers’ time resources, especially in companies employing large numbers of employees, where it would otherwise be necessary to arrange face-to-face meetings with each employee to sign an amendment to their contract.
At the same time, opting for a pay sheet can bring additional benefits to employers. They can use it to potentially reorganize employment relationships, especially if they intend to dismiss an employee, but cannot do so based on the reasons stated in §52 of the Labor Code. In such a case, they can gradually cut their pay using their pay sheet, resulting in the employee handing in their notice themselves.
When using pay sheets, it is necessary to meet certain formal requirements. Employers are obliged to adhere to a prescribed form and content of the pay sheet. It is also necessary to inform an employee of using a pay sheet no later than on the first day the pay sheet takes effect. It is vital to note that the pay stated in the pay sheet cannot be lower than the minimum wage, and there must be no discrimination against employees (all employees should be remunerated equally for the same amount of work).
Pay sheets can also be convenient for employees, since no bonuses can be added to the pay stated on a pay sheet. Therefore, pay stated in a pay sheet cannot include up to 150 hours overtime per year, as it often happens when pay is agreed in an employment contract.
As indicated by the above-mentioned factors, pay sheets provide employers with a lot more flexibility when it comes to their wage policy, and enable them to effectively respond to various situations. However, using pay sheets requires employers to responsibly abide by the legal regulations and treat their employees ethically.
Download PDF: Difference Between Pay Assessment and Pay in Contract
