Wage Guarantee Element in National Collective Agreements

The Wage Guarantee Element (so called EGR) is a one-off payment provided by several National Collective Labour Agreements as a form of compensation with an equalizing purpose. The employer pays the EGR to the employee, and it is subject to taxation and social security contributions under current legislation.

Generally, the payment of the EGR is conditional upon the absence of second-level bargaining that provides for performance-related bonuses, as well as the absence of additional economic treatments beyond those set by the collective agreement.

The amount, the recipients, the impact on contractual institutions such as additional monthly payments and severance pay, and the methods of payment of the EGR are defined autonomously by each individual NCLA.

Examples of NCLAs that include the EGR

NCLA for Graphic Arts and Publishing (Industry)

Since 2012, the NCLA for Graphic Arts and Publishing (Industry) has granted a gross annual amount of €250.00 (or less, to offset any additional treatments) to permanent employees who have been in service since January 1st of each year, work in companies without second-level bargaining, and have not received individual or collective additional economic benefits in the previous three years beyond those provided by the NCLA.
The EGR is paid with the April salary of the following year. In case of early termination of employment, the amount is granted in proportion to the full months of service worked.

NCLA for Telecommunications

Starting in 2011, the NCLA for the Telecommunications sector provides a gross annual EGR of €260 (or less—offsetting any additional economic treatments) to permanent employees working in companies without second-level bargaining on performance bonuses and who have not received additional individual or collective economic treatments beyond those set by the NCLA in the previous year.

The EGR is paid in a single installment in April each year.

At company level, the NCLA allows employers to extend the EGR to fixed-term employees with contracts longer than six months and to other forms of subordinate employment.
The amount is adjusted proportionally in cases where the employee worked less than a full year or has a part-time contract.

If the employment relationship ends before the payment month, the accrued EGR must be settled with the final pay.

This amount is excluded from the calculation base of the severance pay and is quantified by also considering its impact on direct and indirect wage elements, whether legally or contractually mandated, and therefore includes them.

NCLA for Clothing Industry

The NCLA for the Clothing Industry, with the aim of promoting company-level bargaining, grants an EGR of up to €350 gross to employees in companies without such bargaining and who do not receive other individual or collective economic treatments beyond those provided by the collective agreement.

This amount is paid with the January salary and is reduced accordingly by any additional individual treatments paid in the previous year.

Full payment is made to workers employed from January 1st to December 31st, while it is calculated in twelfths for those employed for only part of the year.

Proportional adjustment is also provided for part-time workers.