Additional agreement on changing the employee’s salary

The reduction in wages occurs strictly in accordance with the law

The need to go into austerity mode arises in a company during times of financial instability. The situation forces management to cut costs, including staff salaries.

The legislation allows for changes in wages downward in certain cases, both at the initiative of the employer and by agreement of the parties. An important requirement is the regulatory justification and documentary evidence of all actions and decisions taken. A balanced approach to the formation of a remuneration system at an enterprise will avoid many difficulties in the future.

Possible reasons

The factors influencing management's decision to reduce an employee's salary are various changes in the activities of both the individual employee and the entire organization as a whole.

The most common reasons:

• falling sales and worsening financial performance of the company;
• reorganization of the company structure;
• decreased employee performance, lack of desire to improve one’s competence, loss of strength;
• inconsistency with the level of professional skill stated at the interview.

The law allows for a reduction in an employee’s pay, in which 2 cases are possible:

• unilaterally at the initiative of the employer;
• with the written consent of the employee.

Labor legislation, in particular all regulations establishing labor standards, fully applies to employees on a probationary period (Article 70 of the Labor Code of the Russian Federation). The employer has the right to reduce the wages of such an employee in the manner prescribed for all employees of the enterprise.

At the initiative of the employer

The employer has the right to initiate a wage reduction

The company's management has the right to unilaterally revise the employment contract, including making changes to the salary part, in the following cases:

• during the reorganization of the enterprise, when maintaining the previous working conditions is impossible;
• based on certification results;
• when changing the bonus system (reducing the variable part of the salary).

In labor legislation there is no such basis for changing wages as the financial problems of the company.

During reorganization

According to Art. 74 of the Labor Code of the Russian Federation, acceptable reasons for unilaterally reducing an employee’s salary may be organizational and technological changes in the structure of the labor process at the enterprise.

Organizational changes include:

1. Changes in the enterprise management system.
2. Introduction of new forms of labor relationships (tenant, contract, team).
3. Switching to a different work schedule.
4. Revision of the labor standardization system.
5. Redistribution of production tasks and areas of responsibility between the structural units of the company.

Technological changes include:

• transition to more efficient production technologies;
• introduction of improved equipment;
• reorganization of workplaces;
• development of new products;
• innovations in technological regulations.

If organizational and technological changes actually took place, then the employer must notify the employee in writing of his intention to reduce wages in advance, no later than 2 months.

What requirements must be taken into account when changing wage conditions?

The list of circumstances under which changes in wage conditions are possible are established by Article 74 of the Labor Code of the Russian Federation and are listed in Resolution of the Supreme Court of the Russian Federation dated March 17, 2004 N 2. Valid circumstances require justification for changes caused, for example, by improvement of equipment, production process, jobs, structure employer.

Objective circumstances include:

• changes in the composition of the management apparatus;
• shifting periods of work and rest;
• application of new or modification of old standards.

Technological changes are expressed in the following events:

• emergence of new technologies;
• commissioning of new equipment;
• bringing innovative products to the market.

The worsening financial condition of the company is not a good reason for changing the terms of remuneration. In any case, if disagreements arise, the responsibility to prove the existence of objective reasons for the changes falls on the employer.

Based on the certification results

Salary may be reduced based on certification results

In accordance with the Supreme Court Resolution No. 2 of March 17, 2004, an employer can conduct an attestation check of an employee’s competence and, based on its results, make amendments to the employment contract, including the salary part. Certification is considered one of the organizational and technological changes in working conditions.

The legislation does not regulate the rules for formalizing the certification process. However, in legal proceedings related to the reduction of employee salaries, it is necessary to confirm the implementation of this procedure.

Documentary support of the certification process consists of the following points:

1. Creation of regulations on certification.
2. Issuing an order to carry out.
3. Formation of the commission.
4. Drawing up a schedule.
5. Development of technology and methods.
6. Recording the results.
7. Approval of results.

The certification regulation is a local regulatory act that determines the legality of conducting an inspection. It states:

• positions subject to inspection;
• types of certification;
• timing and procedure;
• the process of formation and activities of the commission;
• Required documents;
• employee evaluation criteria;
• rights of employees and management;
• rules for reviewing the results and challenging them.

In legal proceedings related to the results of certification, the decision is most often made in favor of the employee.

The employee should be familiarized with the provisions on certification before signing the employment contract at the time of hiring or when entering it. This regulatory act must be included in the company’s labor regulations, issued in the form of a separate agreement or placed in the personnel section. The document is approved by the General Director.

Reducing the variable part

Reducing bonuses is the most obvious way to cut salaries

If it is necessary to reduce personnel costs, the first step is to consider the possibility of reducing the non-fixed part of remuneration. The bonus regulations should be changed and additional payments to the basic salary should be reduced.

The employer has the right to approve acts establishing the variable part of the salary (Articles 8 and 22 of the Labor Code of the Russian Federation). To do this, the manager must issue an order to change the bonus regulations and submit the amended document for consideration by the employees. After reading it, employees must sign.

In some cases, a local act can only be enforced with the consent of the representative body of employees (Article 8 of the Labor Code of the Russian Federation).

Nuances

Article 44 of the Labor Code separately stipulates the rules by which the provisions on remuneration are changed if it is attached to a collective labor agreement.

If the provision is an independent document, then it can be changed only on the basis of Article 372 of the Labor Code.

The latter states that before making changes, the manager must discuss his decision with the elected body of the primary trade union organization (at large enterprises, if any). However, in practice this does not happen often. In the absence of a trade union organization, the decision to change is made by the manager alone. Moreover, even if the boss has a protocol of disagreements submitted by the trade union, he can still accept a new version of the wage regulations. Moreover, he can do this in two ways:

1. Issue a separate document - an order to amend the Regulations on remuneration with mandatory notification of employees against signature;
2. Accept (approve) the new edition of the Regulations and certify it.

In the latter case, it is also necessary to notify employees, but in other ways.

At this point, the rule applies: if the Regulations were adopted by order of the manager, then they must be changed by issuing and signing an order. If the Regulations were approved by stamping “Approved,” then no order needs to be issued. In this case, it is necessary to completely rewrite the document with changes and accept its new edition.

In case of financial difficulties

Financial crisis as a basis for salary cuts

The employee has a weaker economic position in the employment relationship and does not bear the financial costs of the employer. Organizations and private entrepreneurs conduct commercial activities at their own peril and risk and do not have the right to shift responsibility to their employees.

Justifications for reducing wages related to the financial difficulties of the organization are not legitimate. The employer should reduce the cost of staff salaries using legal mechanisms.

If the demand for a company's product or service drops to a critical level, the manager has the right to decide to suspend the company's activities due to unfavorable economic conditions. In this case, the work of both the company as a whole and individual departments and employees may be stopped. In this case, the employer must pay the staff 2/3 of the average salary.

Main nuances when drawing up an agreement

The agreement form does not have a unified form and, like an employment contract, can be formed in any form or according to a template developed for this type of paper within the company and approved in its accounting policies. However, at the same time, in form and structure it must comply with certain standards of office work, and in text and content - with the rules of the Russian language.

In addition, there is a number of information that must be indicated in the document:

• The form must include the name of the employing company, position, full name of the employee, number and date of the employment contract to which this additional agreement relates.
• Further in the text of the document, you should indicate the fact of reaching an agreement, the reasons for changing the salary (if desired or as necessary), and also reflect point by point all the changed conditions (here you must enter the new salary amount).
• You should also be sure to write down the date on which these changes come into force, and also note that this agreement serves as part of the employment contract.

Documenting

If the company has undergone reorganization changes, as a result of which there is a need to reduce employee salaries, the entire process should be documented.

Required documents:

1. Order on organizational and technological changes in working conditions.
2. Order on changes to the terms of the employment contract.
3. Notice to employees about upcoming changes.

If the employee agrees to the new conditions, an additional agreement on changes in wages is concluded with him. In case of refusal, he is subject to dismissal (clause 7, part 1, article 77 of the Labor Code of the Russian Federation).

If the salary is reduced by agreement of the parties, the following documents will need to be completed:

• additional agreement to the employment contract;
• order to change wages and staffing.

When changing the variable part of the salary:

• order to change the bonus regulations;
• new version of the provision with changed conditions.

How things can change

There can be as many wage regulations as there are organizations. This document is a local regulatory act that is adopted by each organization separately. And it can also be edited at the discretion of the manager.

Naturally, when making changes, the norms of the labor code and other laws must be observed. In addition, employees must also agree to accept the changes that are planned to be made. So, the text of the provision may change as follows:

• A paragraph, paragraph or subparagraph may change completely. In the text of the order, this can be read as “Clause 2 shall be stated in the following wording...”.
• Be supplemented by a paragraph, subclause or entire clause of the agreement.
• A piece of text (clause, chapter, paragraph, subclause, etc.) may lose its power completely. It is simply not spelled out in the new version of the regulations.

Reduction limits

Minimum wage - salary reduction limit

By law, an employee’s total monthly income must not be less than the state-established minimum wage (minimum wage). An employee's total income includes both the basic salary and bonuses, compensation and allowances.

In some regions of the Russian Federation, their own analogue of the minimum wage is being introduced - the minimum wage (MW). This value cannot be less than the minimum wage; as a rule, it is much higher. An organization operating in the region should focus on the local minimum wage indicator in its salary policy.

There are reservations: the law obliges the employer to pay a salary not lower than the minimum value only if the employee has conscientiously worked the required amount of time. Employees who work reduced hours may receive less than the minimum wage.

In this case, the payment is calculated in proportion to the time worked. When lowering the level of wages in any possible way, the employer must ensure that its decisions comply with the provisions of the minimum wage law.

How does salary depend on the minimum wage?

The minimum wage is set at the federal level and currently amounts to 11,163 rubles . In addition, regions have the right to set their own minimum wage, but not lower than the federal one.

If an employee is paid a minimum wage, it should be remembered that it cannot be lower than the minimum wage. This is required by Article 133 of the Labor Code. The requirement applies to wages for a fully worked month . If an employee worked part-time, was on sick leave or on vacation, got a job or quit this month, then the salary may be lower than the minimum wage.

To understand how much you need to raise wages after increasing the minimum wage, you should find out whether the region has established its own minimum. If it is not there, you need to focus on the federal level. If the region has established its own minimum wage, the salary should not be lower than this value.

The only option not to take into account the regional minimum is to submit to the executive authorities a reasoned written refusal of the proposal to join the established minimum wage. The refusal must be discussed with the union in advance. It is also necessary to develop measures and deadlines within which it is planned to increase wages to the regional minimum. The employer who has submitted a refusal may be invited to a conversation with the head of the authorized government body , at which representatives of the trade union must also be present. If we can reach an agreement, then for some time the regional minimum wage will not be taken into account.

But, we repeat, the maneuver described above requires really compelling reasons. Therefore, in general, the minimum wage level coincides with the regional minimum wage.

Is it possible to challenge

Wages are the main source of income for most citizens of the Russian Federation. Decreasing it has negative consequences. If the process is justified, it is impossible to challenge it.

But often employers pursue selfish goals by cutting employee salaries. Such phenomena are subject to challenge in court, and employees have the right to demand compensation.

If management lowered wages unilaterally for a reason not provided for by the Labor Code of the Russian Federation, and did not provide written explanations, then a claim must be filed in court or the labor inspectorate. Most often, such appeals are considered in favor of employees.

Through the court

A statement of claim is filed in court against the employer, in accordance with (Article 391 of the Labor Code of the Russian Federation). The deadline for filing a claim is 3 months from the date of notification of a salary reduction (Article 386 of the Labor Code of the Russian Federation).

Important points of the claim:

• name of the court;
• the applicant's position;
• the amount of payments that the plaintiff lost;
• indication of violations on the part of the employer;
• amount of recovery from the defendant;
• list of documents attached to the application.

Through the labor inspectorate

Citizens whose rights have been violated during labor relations have the right to contact the Federal Labor Inspectorate. Illegal salary reduction is one of these offenses.

After reviewing the application, an inspector is sent to the place of work. He checks the employer’s compliance with the labor legislation of the Russian Federation. If violations are detected, the management of the enterprise will be given an order obliging them to eliminate them by a certain date.