Slovakia: New rules on employing external workers

Strict rules on the employment of external workers have been added to the Slovakian Labour Code. The amendments mean that the length of contract, working hours and pay are no longer a matter for negotiation between employer and worker. The government hopes the new measures will stop abuses such as the non-payment of social security contributions.

Labour Code amendments

The amendments to the Labour Code limit the duration of any agreement between an employer and external worker to a maximum of 12 months. Employers now also have to pay these workers, plus their social and health insurance contributions, by the end of the month following the month in which the work was performed.

According to the Labour Code, employers can use one of three ‘assignment’ contracts to employ external workers who are self-employed. These contracts cover:

  • agreements on work performance (a one-off job done on a specified date);
  • agreements on work activity (a job performed repeatedly within a specified period);
  • an occasional activity determined by the type of the work (the kind of temporary job normally done by students).

Before amendments were made, the onus was on the employer and the employee to agree the duration of the contract and the necessary compulsory contributions for social and health insurance. However, the government has said this practice resulted in some employers avoiding paying the wages and contributions of casual workers. Indeed, some employees’ contributions were missed for years, which not only damaged employees' pension rights, but also damaged public finances.

The latest amendment:

  • limits the duration of an assignment contract to a maximum of 12 months;
  • obliges employers to pay social and health insurance contributions for temporary contracts for students;
  • orders payments to be made not later than the end of the calendar month following the month in which the work was completed – in the case of one-off jobs, payment is to be made when the work is completed and performance demonstrated.

Social partner views

Before the changes became law, the Federation of Employers’ Associations of the Slovak Republic (AZZZ SR) said the amendments would increase employers’ administrative burden. The federation also criticised the maximum length of the new contracts (in Slovakian), proposing instead that they should be regularly renewed in situations where it is impossible to gauge the length of time a task will take. At a meeting of the tripartite Economic and Social Council, in February 2014, a representative of AZZZ SR also suggested that employers should pay social security contributions annually instead of every month.

Opposition MP Jozef Mihál echoed these arguments in parliament (in Slovakian), saying that it might be better to change Act No. 461/2003 on social insurance rather than the Labour Code. He also objected to the unnecessary bureaucracy faced by employers because of their new obligation to cancel and then renew a worker’s registration with the Social Insurance Agency.

However, parliament approved the amendments to the Labour Code without incorporating any of the new suggestions, and they became law on 1 July 2014.

Outcome of changes

The Ministry of Labour, Social Affairs and Family says it has received no comments or objections about the changes, and one can therefore conclude that the changes have been implemented smoothly, with employers absorbing the new administration without any serious problems. 

The number of assignment contracts dipped shortly after the changes became law in July 2014, but has again risen, as can be seen in Table 1. The table does not include agreements on students’ temporary work because of their seasonal nature.

Table 1: Number of ‘work performance’ agreements by month in 2014 and first quarter of 2015
 

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

2014

126,648

142,759

155,124

157,001

166,711

168,289

160,001

158,587

163,917

168,615

170,940

163,106

2015

122,300

134,266

140,590

143,843

               

Source: Social Insurance Agency, Bratislava 

Table 2: Number of ‘work activity’ agreements by month in 2014 and first quarter of 2015
 

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

2014

165,950

169,446

177,699

182,942

187,057

191,773

180,695

182,873

197,255

203,096

203,390

198,630

2015

182,670

187,768

195,147

200,013

               

Source: Social Insurance Agency, Bratislava 

Data also indicate that the new regulation has helped to fulfil the aim of the Slovak Government Programme 'to create a culture of avoiding all kinds of discrimination in employment relationships at workplaces'.

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