Can a higher salary cover other employment-related payments?

In practice, many employers and employees agree on a monthly salary that is higher than the statutory minimum. The idea is often that this higher amount will cover not only the employee’s ordinary work, but also additional entitlements such as overwork, Sunday work, night work, or other wage-related claims. This raises an important legal question: can a higher agreed salary lawfully cover those additional payments?

Greek labour law sets minimum pay thresholds through legislation and collective labour agreements. These rules are designed to protect employees and to address the unequal bargaining power that often exists in employment relationships.

That said, the law does not prevent the parties from agreeing on more favourable terms for the employee. A salary above the statutory minimum is therefore entirely lawful. The real issue is whether that additional amount can also be treated as covering specific employment-related claims.

According to the case law of the Greek Supreme Court, this is possible only under certain conditions. Most importantly, there must be a specific, clear and express agreement between employer and employee, which may be included in the employment contract. In addition, the employee must still receive at least the minimum pay and allowances required by law or by the applicable collective framework. Greek case law has accepted this type of arrangement in relation to claims arising from overwork, Sunday and public holiday work, night work, sixth-day work under a five-day system, and compensation for loss of weekly rest.

This approach was confirmed again in the Supreme Court’s more recent decisions no. 1574/2022 and 176/2023. In simple terms, the Court has made clear that such agreements are not automatically invalid as a hidden waiver of employee rights, as long as the employee still receives the mandatory minimum remuneration and the arrangement is clearly agreed between the parties.

However, one important limit should be highlighted: an employer cannot unilaterally decide that amounts paid above the statutory minimum should be treated as covering surcharges for work performed outside normal hours. The Supreme Court has expressly held that what is prohibited is the employer’s one-sided allocation of higher pay against claims for Sunday, public holiday, or night work.

A further distinction is also important. While overwork may, under the conditions described above, be covered by a valid contractual arrangement, overtime is treated much more strictly.

Article 8 § 4 of Legislative Decree 4020/1959 provides that any agreement stating that overtime pay is already included in a salary above the statutory minimum is void. The rule is intended not only to secure payment, but also to protect employee health and safety by discouraging excessive working time.

That said, some Supreme Court decisions have accepted a narrow exception: where the parties agree in advance on a specific additional payment for clearly identified future overtime, including its timing and number of hours, that arrangement may be valid. This does not change the general rule. What matters is that the overtime must be precisely identified and not simply absorbed into a broadly higher salary.

The courts have also made clear that some employee entitlements cannot be absorbed into higher pay at all. A key example is holiday pay and annual leave allowance.

According to Supreme Court decision no. 1117/2017, any agreement seeking to offset higher remuneration against those amounts is void, because it would undermine the social purpose of annual leave: ensuring that employees can actually take and enjoy their rest period with the financial support the law guarantees.

The main takeaway is that a salary above the statutory minimum does not automatically cover every employment-related claim. In some cases, Greek law allows a higher salary to be allocated against specific claims, but only where there is a clear agreement and the employee’s mandatory rights remain fully protected. For employers, careful drafting is essential. For employees, the wording of the employment contract can make a significant difference.