Basic pay

What it means

The basic wage is the fixed part of pay an employee receives for work done, according to time worked or output achieved. It usually takes the form of a monthly salary or an hourly rate agreed in the employment contract or set by a collective agreement or pay policy.

The basic wage may not be lower than the minimum wage entitlement for the level of job difficulty the employee performs. The Labour Code distinguishes six levels of difficulty and sets a minimum for each, derived from the minimum wage.

Other components are added to the basic wage: supplements for overtime, night or weekend work, bonuses and compensation payments. Together they make up gross pay, but only the basic wage is compared with the minimum wage entitlement.

How it works in practice

When preparing employment contracts with clients we assign roles to difficulty levels and check that the agreed basic wage reaches the minimum. When the minimum wage rises on 1 January we review all contracts, because the minimum entitlements rise with it.

We recommend that the basic wage forms a substantial and stable part of pay. If most income comes from variable discretionary bonuses, the employee has no certainty, and in a dispute it is hard to show what they were entitled to.

With hourly-rate pay systems we check that pay has not fallen below the minimum in a shorter month. With a monthly salary we deal with pro-rating for joiners and leavers during the month according to days worked.

What to watch out for

Counting supplements or bonuses towards the basic wage to reach the minimum on paper is not allowed. The minimum entitlement is compared with the basic wage excluding supplements, and the employee can claim the difference retroactively.

Placing a role in too low a difficulty level is a frequent labour inspection finding. What counts is the actual content of the work, not the job title, so we recommend describing the work truthfully in the contract.