Understanding Wage Payment Structures and Regulations

Posted on Mar 30, 2025 in Economy

Wage Receipt Requirements

Wage receipts must be delivered using the official model and conserved in detail for six years. A wage receipt should include: Wages + Accessories – Deductions = Net Pay.

Wage Structure Components

Base Salary

The base salary is the worker’s pay, set by unit of time, labor, or both, without regard to circumstances that warrant allowances.

Accessories

Accessories are amounts added to the base salary, fixed in response to circumstances relating to the worker, the work done, or the business results. These can be categorized as:

  • Personal allowances
  • Job complements based on company results

Extraordinary Bonuses

Workers are entitled to at least two extraordinary payments per year.

Types of Perceptions

Perceptions include:

  1. Salary base
  2. Complements: Knowledge, seniority, personal, special
  3. Workplace factors: Difficulty, toxicity, danger, shift work, night work
  4. Quality or quantity of labor: Incentives for attendance, punctuality, production, overtime, commissions
  5. Participation in other benefits and gratuities
  6. In-kind benefits
  7. Residence benefits

Concept of Wages

Wages are the total economic compensation a worker receives for their labor.

Kinds of Salary

Depending on the Nature:

  • Time-based: Salary estimated for the length of work, not the quantity produced.
  • Work-based: Fixed by the quantity produced, not a function of time worked.
  • Mixed: A fixed amount for time worked plus a variable amount based on performance.
  • Task-based: Paid a certain percentage per product worked.

According to Fixing Method:

  • Metallic: Paid in cash, by check, or other form of payment.
  • In-Kind: Delivery of property that is not money. This is acceptable if combined with cash payment.

Minimum Wage (SMI)

The minimum wage (SMI) is legally established for each work period (hour, day, or month). The minimum wage for 2010 was €22/day, €673.92/month, and no less than €8866.20/year. (Cannot pay less than €6/hour). This amount may be increased or reduced based on professional and business conventions or training situations. The SMI is fixed annually by the Government.

Guarantees of Wages

Unpaid wages have the following preferences:

  • Wages for the last 30 days of work have preference over any other claim, up to double the minimum wage.
  • Wage claims have priority over all other claims regarding articles produced by employees, while owned or possessed by the employer.
  • Unprotected unpaid wages will have privileged status in the amount of three times the minimum wage multiplied by the number of days of unpaid wages.

Wage Guarantee Fund

Established in the 1970s and governed by Article 33 of the Workers’ Statute. It includes a chairman, representatives from public administration, union organizations, business representatives, and a secretary.

Benefits of the Wage Guarantee Fund

  • Salaries: Payment of outstanding wages, including handling, in the event of company insolvency or bankruptcy.
  • Compensation: Payment of compensation awarded due to rulings, orders, court conciliation, or administrative decisions in favor of workers due to dismissal or contract termination.

Payment of Salary

According to the contract agreement:

  • Monthly: Paid monthly.
  • Daily: Paid daily.
  • Hourly: Paid every 15 days, weekly, or monthly.
  • Performance-based: Paid by production.
  • Mixed: Basic salary plus piece rate or production-based pay.

Payment must always adhere to the pattern of each employee and meet the minimum wage for 8 hours of work.