Wage transfer: under what conditions?

Credit agreements often include a clause stating that the beneficiary must assign part of their salary to the credit institution as a payment guarantee. In case of repayment issues, the employer may receive a registered letter from the credit institution requesting the employer to transfer a portion of the salary directly and irrevocably to the institution. The employer is obligated to comply with this request, otherwise, they may be forced to settle the debt themselves.

However, before complying, the employer must ensure they have received a copy of the notification from the credit institution to the employee, informing them of the intention to transfer the salary. This is to avoid the employee being caught by surprise. The employer must also receive a certified copy of the salary transfer document, which should include the employee’s signature and the employer’s address. Additionally, the document should be separate from the actual sales agreement and refer to Articles 28 to 32 of the Law of 12 April 1965. In practice, the creditor’s stamp "certified true copy" is considered valid.

If any of the above formalities are missing, the employer should contact the credit institution as soon as possible for the necessary adjustments. If the employer carries out the salary transfer without meeting all legal requirements, they risk having to compensate the employee.

It is, of course, not allowed for the employer to transfer the employee’s entire salary to the relevant institution. In this context, the employer must comply with Article 1409 of the Judicial Code, which determines the transferable portion of the salary. For example, for a monthly salary of 1344 euros, the maximum transfer is 96.10 euros. For the portion of the salary above 1344 euros, in principle, the entire owed amount can be transferred to the credit institution.