New rights and obligations for employers: Lump-sum compensation of the expenses of the employer as a payer of wages in case of execution and the information duty towards the bailiff

31. 8. 2022

On 1 January 2022, an amendment to the Code of Civil Procedure and Enforcement Code came into force, which entitles employers who make deductions from an employee’s wages, particularly in the case of multiple executions with increased administrative burden, to lump-sum compensation equal to CZK 50 per month per employee, against whom an execution (or multiple executions; the amount is not increased) has been ordered by deductions from wages.

However, employers’ entitlement arises only for the enforcement of decisions or executions that have been initiated after the amendment came into force, so from 1 January 2022. It also does not apply to deductions from wages as a consequence of insolvency proceedings.

It is not necessary to specify in any way or precisely quantify these costs in order for the entitlement to compensation to be acknowledged. The employer simply deducts the lump-sum compensation from the deducted amounts before sending it to the court or bailiff. If the employer does not deduct the lump sum amount in a particular amount, its right to compensation expires.

The employer’s lump-sum entitlement to compensation shall have priority over all other claims and shall be satisfied also from the first third:

When making execution deductions from the wage, an unseizable amount shall be determined. The remaining part of the wage (or other income) shall be divided into thirds.

Non-priority claims and priority claims shall be satisfied from the first third (priority claims exceeding the seizable amount from the second third) . Priority claims shall be satisfied from the second third (if there are none, this second third shall remain with the employee). The third third always remains with the employee.

If less than CZK 150 remains after the deduction of unseizable amounts and one-third of the remaining net wage (after deduction of the basic – total unseizable amount) in the event that it is deducted for priority claims, or after the deduction of unseizable amounts and two-thirds of the remaining net wage if it is deducted only for non-priority claims, the lump-sum compensation shall be reduced proportionally; its amount shall form a third of the amount.

In addition, the amendment has also increased employers’ administrative burden: They are now required to inform the bailiff, to whom they must, on its request, disclose information about the wage, deductions made from the wage and details concerning the employment relationship with the employee.

 

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