It is a fact that among the rules on wages and salaries it is the practical problems of the calculation of the absence fee that causes the most headache to the colleagues dealing with employment administration.
Another reason why we deal with this matter now is the fact that the act number LXXV. of 1996 on labor inspection provides that controlling the amount of the wage and the compliance with any regulation related to the protection of the wage, falls within the jurisdiction of the labor inspection.
In view of this we summarized the most common misbelieves related to the calculation of the absence fee.
misbelief #1
The amount of the absence fee is equal to the average wage
The institution of absence fee was introduced to the act number XXII of 1992 on the Labor Code (hereinafter as Mt.) by the modification of 1995 (act number LV of 1995) and this replaced the institution of ‘average wage’ in cases when the previous rules ordered the payment of average wage to time not spent with actual work.
According to the Mt. if absence fee is to paid to the employee then the employee is entitled to the average sum of the personal base wage effective at the time of the absence, the regular bonuses and the overtime bonus payable for work hours different from the work schedule and the work hours exceeding the work hours framework, calculated for the time period of the absence. Contrary to this the Mt. provides that when it comes to the calculation of the average wage then every particular fee paid as part of the wage shall be the basis for it and the employee is entitled to the average wage payable for the time period of the calculation.
It is clear from the base of the average wage and that of the absence fee that the amount of these is not equal (BH 2003.971). When it comes to the calculation of the absence fee then the law provides for it in detail explaining what elements of the wage have to be taken into account and how.
Although the purpose of the legislator with the introduction of the absence fee in 1995 was partially to make sure that the employee does not receive more benefit by being absent than by actual work, we cannot say that the sum of the average wage is always bigger than the absence fee of the employee and that it is better and safer for the employer to calculate everything with average wage and that this way the employer plays safe.
misbelief #2
When it comes to the calculation of the absence fee it is irrelevant what scheme the employee is employed with and based on what work hours schedule
The Mt. provides that the bonuses the employee is regularly entitled to shall be taken into account during the calculation of the absence fee. The regular bonuses can be defined by the parties in the labor contract or in collective agreements although legal title and percentage of these bonuses basically derive from the work scheme relevant to the employee and the employee is entitled to these without further agreement merely based on the law.
Relating to this it is important to mention the rules of Section 118 Paragraph (1) of the Labor Code that provides that the employer decides on the work scheme, the work hours framework and the rules of calculating the daily work hours – in lack of different provision of a collective agreement – so the previous or subsequent approval of the employee is not required. Basically this is a basic right of the employer deriving from employment and closely related to the right of management and directing.
At the calculation of the absence fee the law provides for the percentage amount of compulsory shift bonuses related to employees hired in multiple shift or uninterrupted work scheme that have to be taken into account during the absence fee calculation as the amount of the ‘average’ shift bonus [Section 151/A Paragraph (3) of Mt].
The amount of the afternoon shift bonus is 15%, the amount of the night shift bonus is 30% during employment in multiple shift scheme. Section 151/A Paragraph (3) of the Mt. provides that during the calculation of the absence fee it is 7.5 % of the employee’s personal base wage that has to be taken into account if the employee is working in a two-shift scheme and it is 15% of the employee’s base wage if the employee is working in a two-shift scheme where the average of the night time work exceeds 30% of the weekly or monthly work hours framework or if the employee is working in a three-shift scheme.
During employment in uninterrupted work scheme the amount of the afternoon shift bonus is 20%, the night shift bonus is 40%. At the calculation it is 20% of the employee’s personal base wage that has to be taken into account if the employee is working in uninterrupted work scheme.
misbelief #3
During the calculation of the absence fee the overtime hours of last year can be omitted
During the calculation of the absence fee the application of extra bonuses for irregular work hours of Section 151/A Paragraph (4) of the Mt. might be necessary beside the regular bonuses.
When it comes to the exact determination of the absence fee, it is not enough to know the work scheme, the work hours schedule and eventually the bonuses defined in collective agreement and labor contract the employee is continuously entitled to, since the extra bonuses related to irregular work hours can only be determined from work hours records of last year for each employee [Section 140/A of Mt].
It is 3% of the employee’s personal base wage that has to be taken into account as extra bonus at the calculation of the absence fee if the irregular work hours of last year exceeded 50%. If the number of irregular work hours reached 100 hours in the previous year or even exceeded it then the amount of the extra bonus is 5% of the personal base wage of the employee.
misbelief #4
During the calculation of the absence fee every particular overtime hours of last year have to be taken into account
It is inevitable to apply extra bonus during the calculation of the absence fee if the employee served more than 50 irregular work hours in the previous year.
At the same time it is a general problem that the employers take every irregular work hours into account regardless of their basis during summarizing the irregular work hours of last year.
It is important to point out related to this that the extra bonus that is to be applied related to absence fee is compulsory only and exclusively for the work hours different from the work schedule and for work hours exceeding the work hours framework and not in any other case. So for example the irregular work hours served during readiness or stand-by are not to be calculated into the 50 hours establishing the extra bonus.
misbelief #5
During the calculation of the absence fee the proportionate part of the premium and prize have to be taken into account if those are regular
It is a typical misbelief that the proportionate part of the premium and prize has to be taken into account during the calculation of the sum of the absence fee. The basis of this misbelief derives from confusing the rules for the calculation of the average wage and the absence fee.
As it is known the basis for the calculation of the average wage is the total wage paid in the corresponding time period and it includes the benefits paid as premium or prize during this period (BH. 1995/6/377).
It is better to know that in the case of prize for example a labor dispute cannot even be initiated because basically it is up to the decision of the employer whether or not this benefit is paid (BH. 1979/9/407).
However the premium and the prize shall be omitted during the calculation of the absence fee since these are benefits above the wage with variable amount and sum not closely regulated by the Mt. furthermore the employee is not continuously entitled to these and these are not to be considered as bonus because of their nature.
Attila Máriás
labor consultant
BDO Hungary