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Employee compensation audit

European legislation introduces new rules on pay transparency, which significantly change the way employers must set wages, career progression, and recruitment processes.

Employers will have to be able to objectively and demonstrably explain differences in remuneration between employees, particularly between men and women performing work of equal or comparable value.

The new rules mainly concern:

wage transparency in the recruitment process
employees' right to information on remuneration
defining objective remuneration criteria
mandatory reporting of pay differences
shifting the burden of proof to the employer

Our law firm therefore provides an employee remuneration audit service to help organizations prepare for the new requirements and minimize legal risks.

On demand

Assessment of the remuneration system in the organization

The first phase is a comprehensive assessment of the remuneration system and its functioning within the organization.

In this phase, we analyze in particular:

the structure of employee remuneration
the method of determining starting salaries
the rules for variable remuneration components (bonuses, KPIs, commissions)
the career advancement and salary growth system
the method of determining salary differences between employees
the existence and quality of internal remuneration rules

The aim of this phase is to identify whether the remuneration system allows for an objective explanation of differences between employees and whether it complies with the requirements of remuneration transparency.

Data collection and remuneration audit

The initial assessment is followed by an analytical phase based on detailed data collection.

Data collection on remuneration

The client provides information on the remuneration system, in particular:

salary categories and job positions
basic salaries and variable components
rules for bonuses and personal allowances
information on starting salaries
criteria for career advancement

Analysis of documentation

We analyze in particular:

labor law documentation
internal wage regulations
bonus and benefit rules
documentation on employee recruitment

Audit of pay differences

Based on the data obtained, we perform an analysis of:

differences in remuneration between employees
differences between men and women
differences between comparable job positions
differences arising in starting salaries

We identify whether these differences are justified by objective criteria or represent a potential legal risk.

Assessment of remuneration criteria

At this stage, we analyze whether the organization has set transparent and objective remuneration criteria.

In particular, we assess:

qualification criteria
level of responsibility
complexity of work
working conditions
criteria for variable remuneration components

At the same time, we assess whether the organization can demonstrate that differences in remuneration are based on gender-neutral criteria and the value of the work performed, not on the job title.

Assessment of the recruitment process

The new rules on remuneration transparency also introduce new obligations in the recruitment process.

The audit therefore also includes an analysis of:

the manner in which salaries are stated in job advertisements
informing candidates about the starting salary or salary range
setting up the selection process
the questions asked during the selection process in relation to the range of prohibited questions under the Labor Code
the prohibition on inquiring about candidates' salary history

The aim is to ensure that the recruitment process is transparent and non-discriminatory.

Reporting and enforcing equal pay

The new rules also introduce mechanisms for monitoring equal pay.

At this stage, we are assessing the organization's readiness for:

mandatory reporting of pay differences
identification of differences above 5%
joint assessment of pay with employee representatives
shifting the burden of proof to the employer

The employer must be able to demonstrate that the pay differences are objective and non-discriminatory.

Audit output

The audit results in:

identification of risk areas in the remuneration system
assessment of compliance with pay transparency rules
recommendations for adjusting the remuneration system
proposal for a transparent remuneration structure
proposal for measures to minimize legal risks

Implementation phase

Based on the audit results, we help clients implement recommended solutions, in particular:

setting up a transparent remuneration structure
defining objective remuneration criteria
amending labor law documentation
setting up the recruitment process
preparing the organization for reporting pay differences

The goal is to create a remuneration system that is:

transparent
objective
defensible in the event of an audit or dispute
in line with European legislation.

Our goal is to benefit our clients

Choosing the right and reliable advisor is always a great help in improving yourself. Above all, legal advice is extremely broad in scope and affects almost all areas of the lives of entrepreneurs and individuals, which is why choosing a legal advisor is extremely important. At Hronček & Partners, s. r. o., we focus on professionalism and high-quality legal services with an individual approach. Our main goal is to provide legal services of the highest quality and to bring innovative and professional solutions to our clients so that we can become their trusted partner.

Hronček & Partners, s. r. o.

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