Understanding Consolidated Pay: Definition and Calculation
Understanding Conglobated Pay in Employment Contracts
In some cases, instead of salary, you may hear about conglobated pay.
However, the meaning of this term may be unknown to most workers who are curious to understand what conglobated pay entails and how the amount is calculated.
Conglobated pay refers to the sum of the basic pay (also known as remuneration or minimum wage) and the contingency allowance, a parameter that, until 1991, adjusted remuneration to the cost of living and was updated quarterly.
Although the contingency allowance has been frozen since November 1, 1991, some national collective labor agreements (Ccnl) still include it under the designation of Edr (distinct element of remuneration), thus integrating it into the salary.
This explains why some workers still hear about conglobated pay, even if many do not know exactly what it means.
Meaning of Conglobated Pay
As mentioned, conglobated pay includes two main components:
- Basic Pay
- Contingency Allowance
The basic pay, also known as base remuneration, minimum wage, or contractual minimum, is the amount of salary established by the Ccnl of the relevant category, based on the contractual classification level of the worker.
This amount may vary in case of:
- Contract renewal, for example, the renewal of public employees’ contracts.
- Change of position, which should involve a promotion to a higher qualification since a change that reduces the basic pay is not allowed.
The contingency allowance, or sliding scale, was a well-known salary component in the ’70s and ’80s when it was quarterly updated to adjust the salary to changes in the cost of living.
Since 1986, the update became semi-annual until it was frozen in 1991.
Since then, many Ccnl have integrated this allowance into the basic pay, while others still consider it a separate item.
Some contracts have replaced the contingency allowance with the Distinct Element of Remuneration (Edr), amounting to €10.33 monthly, which does not vary as it is not linked to the cost of living adjustment.
Edr is paid monthly to private sector workers, excluding executives, usually found at the top of the pay slip, influencing the calculation of the thirteenth salary and the end-of-service gratuity (Tfr), but not the fourteenth.
Conglobated Pay: Exceptions in Various Ccnl
Some Ccnl provide different items compared to the commonly present Edr in the payslip:
- Commerce Ccnl: Includes a non-absorbable distinct element equal to 0.30% of the sum between basic pay and contingency, paid for 14 months.
- Logistics, Freight Transport, and Shipping Ccnl: The Edr is fully paid replacing Easter holidays, November 4 (National Unity Day), and Armed Forces Day.
- Banking Ccnl: The Edr is paid through a 6.05% increase in remuneration, non-absorbable and not concurrent with the calculation of the thirteenth salary and TFR.
- Professional Studies Ccnl: Article 7 bis states that in case of omission of the amounts intended for joint responsibility, the employer must pay the employee a non-absorbable Edr worth €23.
Understanding conglobated pay and its components is crucial for properly evaluating a job offer and gaining clarity on your payslip.
Detailed knowledge of this item allows workers to better understand their remuneration and negotiate their salary or increases with greater awareness.
