Greece: Seniority-based wage increases returning in 2024

Employer Action Code: Act

Law 5053/2023, approved by the Greek Parliament in September, amends the Labor Code to transpose the provisions of European Union (EU) Directive 2019/1152 on transparent and predictable working conditions. The law also includes a number of changes unrelated to the directive, notably the reinstatement of seniority-based increases to the minimum wage and to certain other payments, which were suspended in 2012 as part of austerity measures. The provisions generally took effect when the law was published in the official government gazette on September 26, 2023.

Key details

• On January 1, 2024, increases to the statutory minimum wage based on years of employment will be reinstated as well as increases to seniority-based payments established by some collective bargaining agreements (CBAs). Under the minimum wage provisions, the rate is automatically increased for every three years of the employee’s work experience with all employers, by up to 30% in total (reached after nine years of experience for workers paid monthly and 18 years for workers paid daily). Similar provisions for other seniority-based payments depend on the terms of the CBA; however, in both cases, these adjustments will not apply for service between February 14, 2012, and December 31, 2023. Note: Starting in 2027, these adjustments could be suspended again by decree if the unemployment rate exceeds 10%.
• The maximum trial period for staff employed on indeterminate-length contracts is now six months (previously 12 months). For fixed-term contracts, trial periods may not exceed one-quarter of the contract’s duration (up to a maximum of six months).
• A new type of employment contract for “on-demand work” covers a specified number of hours and schedule that could be worked during a fixed period of time. The minimum compensation due is based on one-quarter of the number of hours specified. Employees are obliged to work when contacted by the employer (subject to a minimum of 24 hours’ notice).
• Employees who have completed their trial period are entitled to request in writing to switch to more predictable and stable work schedules and working conditions. Employers must reply in writing within one to two months (depending on employer size) and justify any request denials. In addition, employers and employees may enter into individual working time agreements (previously, this was only allowed through CBAs).

Employer implications

Law 5053/2023 introduces significant changes to employment law. The resumption of seniority-based pay increases could increase labor costs and present administrative challenges for companies with employees with service prior to 2012. Employers should review the changes and modify their policies and practices as appropriate.