Hospitality and tourism: increase in salaries and annual leave allowance as of March 2020

The Annex to the Collective Agreement for the Hospitality and Tourism Industries of Slovenia (KPGT) was published on 28 February 2020 in the Official Gazette of the Republic of Slovenia No 12/2020, the changes to KPGT are in force from 1 March 2020 onwards.

Under the Annex, employers in the hospitality and tourism industry in Slovenia will be required to pay employees annual leave allowance of at least EUR 1,150.00 for 2020.

In light of that we would like to point out that hospitality and tourism industry employers, which have (with certain or all employees) individual employment contracts with a fixed annual leave allowance that is less than the KPGT minimum, must pay the minimum annual leave allowance as set under KPGT. However, it is up to employers whether they pay a higher rate of annual leave allowance, but where a higher amount is set down in an individual employment contract, that amount must be paid. In any case, the 2019 changes regarding the taxation of annual leave allowance, which we wrote about in our May issue, also need to be taken into account when paying annual leave allowance.

As of 1 March 2020, the lowest basic gross salary payable in each pay scale increased, with another increase planned to take effect from 1 July 2020. The minimum basic gross salary for the first pay scale is, as of 1 March 2020, EUR 504.00 (previously EUR 480.00) and from 1 July 2020 onwards it will rise to EUR 529.20. As of 1 March 2020, the minimum basic gross salary for the seventh pay scale is EUR 1,048.72 EUR (previously EUR 979.20) and from 1 July 2020 onwards it will rise to EUR 1,101.16. Therefore, overall minimum basic gross salary will increase 10.25% by 1 July 2020.

May we remind you that pursuant to the Labour Relations Act (ZDR-1), salary comprises basic salary, job performance bonus and allowances. Basic salary is the most important component as it is the only »permanent« regular income which the worker can count on. Allowances and other salary components are then added to the basic salary if the employee is entitled to them. However, the concept of basic salary cannot be equated with the term minimum wage, which is set under the Minimum Wage Act (ZMinP), which is why we wish to emphasise that the Annex will not affect minimum wage provisions. For more information on minimum wage, see our article from 2019, which looks at revisions and instructions that employers must comply with.