Employee Benefits in Greece
Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Greece might not all be familiar to you yet. By using our PEO and EOR service, we can provide compliant labor contracts for employees in Greece including local benefits. When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In Greece, benefits can be guaranteed by labor law and national legislation, as well as collective agreements with trade unions or workers’ councils.
Our guide will explain what benefits and employee compensation are guaranteed, and what can be modified, for any employer who wishes to expand their business into Greece.
What Greece Compensation Laws Exist?
In Greece, compensation laws vary depend on the employee classification and the sector they are working in. Employers must also keep in mind that benefits also vary depending on the applicable collective labor agreements or internal work regulations of the company. Employees in the private sector are entitled to 14 monthly salaries per annum, which includes a Christmas bonus (one month’s salary), an Easter bonus (half a month’s salary), and the annual holiday leave allowance (half a month’s salary), which must be paid on specified dates, according to Greek legislation.
Greek legislation also prescribes employee compensation for overtime during the week, work on a Saturday (for a five-week work system) and work on a Sunday and public holidays. Compensation is also recommended for business trips/work away from the employee’s normal place of work (overnight stays). There are, however, other benefits/compensation which are guaranteed by Greek legislation:
- National Minimum Wage – is set at €758.33 per month in 2019, after the introduction of a new mechanism. From January 1, 2021, the minimum wage will be frozen – but it is set for a review in July 2021;
- Social Insurance Contributions – the amount of the contributions varies according to the collective agreements, benefit plans and social security funds. Employees are entitled to social security, which is paid by both employer and employee, and is paid monthly (employee contributions are with-held and paid by the employer). Social contributions include pension, healthcare, unemployment, and other benefits according to the collective agreements and industry;
- Notice Periods – This depends on the employment contract type, as well as the collective agreements. For an indefinite employment agreement – after 12 months of work, an employee must be given a notice for dismissal/termination, which ranges from one month to 4 months for over 10 years of employment;
- Redundancy, Termination and Severance – employees are entitled to severance compensation after the probationary period of 12 months. Severance payments vary according to the amount of time employee worked. The maximum payment is 12 months’ (gross) salary for over 16 full years of work. However, if any employee has reached over 16 years of service at the same employer (as of November 2012), they are entitled to one more salary for very completed year of service from 17 to 28 years. For redundancy, this can vary according to collective agreement and employer policy;
- Work Hours and Breaks – employees are entitled to 40 hours a week, which can be split into 5 days (8 hours a day) or 6 days a week (6 hours and 40 minutes a day). Rest periods or breaks are guaranteed at a minimum of 15 minutes for workdays over 6 hours;
- Sick Leave – depending on the number of the years of service with the employer, an employee may take sick leave for up to 6 months and is entitled to up to one month’s salary, which is partially reimbursed by the employer and partially by the social security system/fund;
- Regarding sickness, the employee is entitled to 50% of their normal pay during the first 3 days. From the fourth day onwards, the Greek Social Insurance Institute (IKA) pays sickness benefits to insured employees;
- Holiday/Vacation Leave – Vacation leave depends on the amount of time the employee has been of service. Annual vacation leave starts at 20 days for a five-day working week, and 24 days for a six-day working week. It then increases by one day per year, depending on the length of service – leave is capped at 26 days for five-day employment and 31 days for six-day employment after 25 years and over of employment;
- Maternity/Paternity Leave – An employee is entitled to 17 weeks of maternity leave (8 weeks before birth and 9 weeks after birth). Mothers are also entitled to a special 6-month leave during which the OAED pays the mother a statutory minimum wage monthly, as well as holiday bonuses and allowances based on the pay amount. Paternity leave, however, is only 2 days’ paid leave on the child’s birth;
Social Security in Greece
Social security contributions vary depending on the social security fund, benefit plans and any other supplementary insurance. Social security contributions are to be granted on an employee’s salary, and with-held to be paid by the employer every month. As of 2021, typical social contributions rates are 36.66% – 14.12% is the employee’s contribution, and 22.54% is the employer’s contribution.
- Employee – 15.33% (2020), 14.12% (2021)
- Employer – 24.33% (2020), 22.54% (2021)
Statutory Employment Costs in Greece
The National Minimum Wage: Employee wages must at least be equal the national minimum wage of EUR 758.33 per month. This wage is determined upon terms provided by the National General Collective Labor Agreement (NGCLA). The terms and conditions of this agreement apply to all employers and employees, irrespective of trade union of employer union membership, as well as sector (private or public).
Statutory costs to be made by the employer and employee also include these monthly contributions:
- Pension – 33% (employer), 6.67% (employee)
- Supplementary Pension – 25% (for both employers and employees)
- Healthcare – 3% for sickness and 0.25% for cash benefits (employers), 2.15% for sickness and 0.4% for cash benefits (employees)
- Unemployment – 17% (employers) and 1.83% (employees)
- High occupational risk (depending on the industry) – 3.25% (employers) and 2.2% (employees)
What Benefits Are Guaranteed in the Greece?
Guaranteed employee benefits in Greece include:
Overtime: There are two type of overtime – overwork and overtime: work between 41 and 45 hours a week is called overwork. Work exceeding 9 hours a day and/or 45 hours a week is called overtime. Overtime payment is guaranteed if the employee is working more than 8 hours, with a statutory increase of 20% on the calculated on the employee’s hourly salary.
Health Insurance: Health insurance is guaranteed to employees who have worked at least 50 days in the past 15 months for a company and are eligible for free healthcare and dental care through social security.
Public Holidays: Greece has about 14 annual public holidays (holidays are announced yearly), and employees are entitled to get those days off.
Vacation Leave: Vacation leave is also guaranteed to employees in Greece, which starts at 20 or 24 days, and increases yearly.
Sick Leave: Sick leave and sick leave payments are also guaranteed to employees, with help from social security funds.
Maternity Leave & Allowance: Greece allows two kinds of maternity leave: the first being before and during childbirth, and the other being for a few months after the birth. In both cases, the mother is entitled to payment, but the leave allowance varies depending on the type of leave taken.
What Restrictions Exist for Benefits and Compensation in Greece?
Social Security – monthly contributions to the primary social security fund (EFKA) are capped and is set at EUR 6,500.
Vacation Leave – the number of vacation days granted to the employee is capped at 26 days for five-day employment and 31 days for six-day employment after 25 years and over of employment.
Severance Pay – The maximum severance payment is 21 months’ (gross) salary for over 28 full years of work.
Overtime – legal overtime can reach two hours a day, and up to 120 hours a year.
Unemployment Benefits – unemployment benefits are discontinued if the recipient does not respond to job or vocational training offers after 3 attempts by the Labor Employment Office (OAED). The duration of these benefits is also restricted and depends on the number of days the insured beneficiary has covered.
Health Insurance and other Benefits in Greece
Employees in Greece are also entitled to health insurance. Public healthcare is delivered by a universal system entitling Greek citizens to free or low-cost healthcare and is funded by compulsory social insurance payments. The services of this healthcare are delivered on a regional basis. However, depending on the benefits a company provides, an employee may choose to use private healthcare. Company benefits may also include car and housing allowance.
Other mandatory employee benefits include pensions, unemployment insurance and accident insurance (although this depends on the industry).