A Comprehensive Outlook On The New Greek Labor Law

Coming out of a long-term fiscal adjustment program, Greece is opening up to new economic opportunities from interested businesses. Logistics and communication infrastructures in Greece are already well-developed, and human capital is abundant. The new Greek labor law passed in 2021 aims to increase the competitiveness of local enterprises and global businesses investing in the Mediterranean country in southeast Europe. 

While the labor act rules in Greece recognize minimum statutory employment rights, for example, fixed working hours with weekly rest days, annual paid leave entitlements, social security contributions, protection from unfair dismissals, and employee privacy at the workplace, the balance of power is weighted toward the employer. 

Continue reading this employment law in Greece guide to staying compliant while hiring and managing new employees in Greece. 

Applicability of the Act

Greece’s labor law covers all contractual relationships between employers and employees in the country. An employee is under the direct supervision or control of the company management and receives a fixed salary from the company to perform fixed work.

However, independent contractors and freelancers are outside the scope of labor regulations in Greece. Companies are encouraged to secure payment terms and IP rights through special contracts negotiated under the scope of Greek employment law.

Employment Contract

Greek employment rules allow employers to conclude indefinite-term or fixed-term contractual relationships with employees. 

An employment contract ensures compliance with local hiring laws and safeguards mutual interests through negotiated employment terms. Greek labor laws mandate employers to include the following information when concluding one: 

• Identity particulars of employer & employee 
• The job role, working hours, and employment conditions
• Date of commencement of the employment
• The salary, bonuses, and methodology used for calculation, payment cycle

Employers negotiating an indefinite-term contract must provide a written agreement within two months of the start date of employment.

Key Provisions of the Act

The primary source of Greek employment law includes

• The constitution of Greece
• The Greek civil code
• Various national laws, legislated decrees, ministerial decisions
• Case laws

Together, they form the basis of labor act rules in Greece. Based on the discussed labor regulations, employers can decide working hours, frame leave schemes and termination rules, show compliance with mandatory payroll obligations, and others, including minimum legal wage, overtime compensation, data protection, and employee privacy. 

Working hours 

• Greek working hours law limits the weekly time to 40, calculated over a five- or six-day work schedule.
• Greek employment law stipulates employers extend the right to disconnect outside regular working hours to all remote employees.  
• The right to disconnect is a proposed human right, empowering employees to not engage in work-related electronic communications such as e-mails or instant messages during non-work hours.
• Further, employers must issue Digital Employment Cards to meet obligations regarding working hours per Greek labor law. 

• Digital Employment Cards record employee time & attendance and are connected in real-time to electronic compliance through a uniform information system – ERGANI II platform. 

Overtime compensation

• Employers can ask their employees to put in extra work time of up to 3 hours per day, capped at 150 hours annually. 
• Overtime compensation per the new Greek labor law is 120% above the employee’s contractual hourly wage.

Minimum wage

• Greece’s employment rules prescribe a legal minimum wage for all private employment relationships. 
• Effective April 2023, the minimum wage in Greece is seven hundred and eighty euros (780,00 €). 
• Further, the labor regulations in Greece determine the gross minimum wage for employees based on their years of experience:
• For employees with three to six years: EUR 784.3 
• For employees with six to nine years: EUR 855.6
• For employees with more than nine years: EUR 926.9

Public holidays 

• The labor act rules in Greece prescribe employers to offer nine paid public holidays in a year: 

1. 1. The first of January (New Year’s Day)
   2. The sixth of January (Epiphany)
   3. The 25th of March (Independence Day)
   4. Easter Monday (date varies)
   5. The first of May (Labor Day)
   6. The 15th of August (Dormition of the Mother of God)
   7. The 28th of October (Ochi Day)
   8. The 25th of December (Christmas Day)
   9. The 26th of December

• Employers can ask their employees to work on statutory public holidays. However, ensure an additional 75% of the statutory day’s pay.  

Leave schemes

Maternity leave

• Greek labor regulations stipulate 17 weeks of maternity leave, which employers can divide into eight months before childbirth and the remaining nine months after the birth. 
• The labor act rules in Greece prescribe paid maternity leave based on work experience with the same employer:

1. 1. Employees with lower than one year of experience: 15 days 
   2. Employees with more than one year of experience: one month

• Greek paid maternity leave provisions applies in case of adoption of a child up to eight years old, or surrogacy. 
• Employers must also extend maternity leaves in Greece to foreigners. 
• Additionally, employers must offer seven days of paid leave to eligible employees willing to undergo medically assisted reproduction.

Paternity leave

• Greek employment law prescribes 14 days of paid paternity leave, which employers can divide as two days before childbirth and the remaining 12 days within 30 days of childbirth. 

Parental leave

• There is no special provision for shared paternity leave in Greece. 
• However, the labor law mandates employers to extend four months of unpaid parental leave for employees who have completed one year of service in the company. 

Annual leave

• Greece’s employment law mandates employers to offer statutory benefits of paid annual leave based on employment experience within the company:

1. 1. For employees with 12 months of experience:
      • 20 days, five-day work week and 
      • 24 days, six-day week
   2. For employees with more than two years and upto 10 years:
      • 22 days, five-day week and 
      • 26 days, six-day week
   3. For employees with 10 or more years of experience: 25 days 

• Further, employers must offer 30 days of paid annual leave to employees with 12 or more years of experience with multiple employers.  
• Greek employment rules allow employers to fix a particular period, i.e., 1 May to 1 September, to take more than half the statutory annual leave. 
• Employers may allow carrying forward the remaining annual leave (if any) to the following calendar year. 

Other leaves                   

Sick leave

• Paid entitlements per Greek employment law due to illness must continue for up to three days, regardless of the number of times in a year. 
• Employers must cover 50% of the daily salary during the sick leave period. 

• Greek labor act rules also mandate employers to pay the difference between the daily cash benefit (insurance) and the employee’s average daily salary from the fourth day upto the following duration:

1. 1. For employees working more than a year with the same employers: One month
   2. For employees working less than a year with the same employer: Two weeks

Special leave

Greek labor law mandates multiple special leaves for various occasions, namely: 

• Carer leave: five days of unpaid leave
• Bereavement leave: two days of paid leave
• Unpaid leave: a wellness leave for up to one year at employee discretion

Marriage leave

The labor act rules in Greece prescribe the duration of paid leave based on the contractual work week: 

• For a six-day work week: paid leave for six days 
• For a five-day work week: five days of paid leave

Election leave: 

• Ministerial Decree decides the length of paid leave. 
• Employees may seek proof of voting to extend leave entitlements per Greek labor law. 

Payroll taxes & obligations

Choosing a fiscal year in line with the official financial year in Greece (1st January to 31st December) helps companies better comprehend payroll obligations per Greek labor laws. Some significant aspects of employer payroll tax obligations in Greece are  

• A registered employer with Greek tax authorities is required to
• Withhold and report taxes on salary paid 
• Deduct and pay social security premiums from employee salary 

Income taxes deduction

Income taxes in Greece are progressive, and individuals must pay taxes per the following slabs: 

• 9.00% tax on salaries up to €10,000
• 22.00% tax on salaries between €10,001 – €20,000
• 28.00% tax on salaries between €20,001 – €30,000
• 36.00% tax on salaries over €30,001 – €40,000
• 44.00% tax on salaries over €40,001

Social security contributions

• Employers must contribute about 23.33% – 24.74% of employee salary towards paying insurance premiums for extending statutory social security benefits.

Payslip

• Greek employment rules prescribe a monthly payroll, and employers must disburse salaries by the last working day of the month.
• There is no mandated template for a payslip. The general practice per the labor code in Greece is to include the following information in the employee payslip:
• Identity of the employer and employee, including company code, employee code, address, etc. 
• The total salary paid and date of payment  
• Particulars of salary, like contractual base salary, allowances & bonuses, and more
• Days of absence or total working time and deductions after that
• Statutory contributions toward social security premium 

Termination of employment 

• Employers in Greece enjoy the flexibility to terminate indefinite contracts without legal complications. 
• To stay compliant with the Greece employment law termination clause, employers must follow the below conditions: 
• Providing written notice of termination of the employment contract
• Payment of lawful compensation for contracts over 12 months
• Employers may terminate fixed-term contracts even before maturity without such obligations towards the employee for severe violations. 
• Since the labor code in Greece has not defined what constitutes a severe violation, the judgment of the courts is deemed final. 

Data protection and employee privacy

Employers must comply with GDPR to gather, store and process employee data for various purposes, including background checks, drafting offer letters, extending social security obligations, employee tax filing and reporting, etc. Additionally, the Hellenic Data Protection Authority directive mandates employers to restrict workplace surveillance to necessary sections. 

Prior employee consent is mandatory for all employment processes. Further, the Greek labor regulations mandate employers with 20 or more employees to frame an internal policy to manage violence and harassment incidents. 

Penalties 

The labor courts in Greece decide on employment issues. However, some specific instances of penalties on employers per the labor code in Greece include: 

• Employers shall be liable for a fine of EUR 10,500 for every deactivated digital employment card. 
• It may also temporarily suspend the employer’s undertaking in Greece if the same liability is reported at least three times within 12 months. 

Additionally, employers can access the Labour Inspectorate (SEPE) to get detailed information on avoiding penalties. 

Compliance Strategies for Employers

Here’s how entrepreneurs and global companies comply with Greek labor act rules while hiring. 

Managing through employment contracts:

• Greek labor act rules prescribe employers guarantee minimum work conditions, legal wage, and other statutory employee rights during employment.   
• Employers may negotiate suitable terms through well-drafted employment contracts to stay compliant with labor regulations in Greece.  

Developing an in-house HR team:

• Growing an in-house team of HR experts specializing in country-specific employment law is the best way to secure employer interest while hiring and managing local talents abroad. 
• In-house HR experts on Greek labor laws can frame suitable working hours and leave schemes, create suitable workplace conditions, and manage payroll efficiently. 
• An in-house team is most useful when negotiating organizational changes, indemnity, employee appraisals, etc. 

Contracting third-party service providers 

• The rise of SaaS-based Employer of Record (EOR) or Professional Employer Organization (PEO) platforms has made global recruitment simpler.  
• Companies can outsource the drafting of all employment-related documents, including background checks, team onboarding, and payroll management per local laws. 

How Can Multiplier Help?

Multiplier is a leading PEO-EOR platform that helps entrepreneurs and global companies expand their business legally through company set-up, automated employment contracts, and payroll management in 150+ countries, including Greece.

Not just that, but experts at Multiplier can help you draft employment-related documents in multiple languages, including Greek and English.