The limit of the amount free from deductions from pay for work will change!

The Parliamentary Committee on Petitions wants to increase the effectiveness of judicial and administrative enforcement. Therefore, she submitted a draft amendment to the Act - Labor Code, Act - Executive Penal Code, Act - Banking Law and the act on cooperative savings and credit unions. The proposed change will affect the limit of the amount free from deductions from remuneration for work!

The current limit on the amount exempt from deductions from pay for work

The amount free from deductions depends on the amount of the minimum wage applicable in a given year.

Art. 87 par. 1 point 1 of the Labor Code specifies that the amount of remuneration is free of deductions in the amount of the minimum wage for full-time employees, after deduction of social security contributions and advances for personal income tax - with deduction of amounts enforced under enforcement orders for claims other than maintenance payments.

A minimum wage will not prevent enforcement

The amendment proposes to amend Art. 87 par. 1 point 1 of the Labor Code. Thanks to this change, the amount free from deductions will be the amount of remuneration for work in the amount of 85 percent. minimum wage for work. An additional change is also to be made in Art. 125 par. 2 of the Executive Penal Code, which will make the remuneration for work, after deducting the advance for personal income tax, only 50% free from enforcement, and not 60% as it is now.

Reasons for making changes

As the authors of the draft emphasize, nowadays many people avoid paying their obligations other than maintenance payments, taking up bogus employment with a minimum wage, which is free of deductions, and receives the remainder of the remuneration in an unregistered manner.

In addition, such a change is supported by the continuous increase in the amount of the minimum wage, the amount of which is getting closer and closer to the median wage, and therefore to the earnings of a significant part of society, thus departing from the amount considered to be the subsistence minimum. This puts debtors in a privileged position vis-à-vis a part of society, which has to incur current expenses from the same remuneration for servicing incurred liabilities.

According to the authors of the draft, debtors will no longer be protected and the situation of their creditors will improve.

The limit of the amount free from deductions from remuneration for work is to protect debtors and provide them with livelihoods. However, in recent years this protection has been abused. The proposed change can definitely improve the situation of creditors, as debts will eventually be collected.