“Grey” salary: one amount on paper, another in hand: what to do under Georgian law

What to do

1. Classification: pay is any remuneration for work, in money or in kind, received from the employer directly or indirectly; cash “in an envelope” is also salary (Labour Code of Georgia, Art. 41). However, the form and amount of pay are set by the contract — the amount in the contract is the starting point, which must be disproved with evidence (Art. 41). Several contracts that complement each other (an offer, a supplementary agreement on a bonus, etc.) are treated as one contract (Art. 14).
2. Deadline: a claim for salary — within 1 year from when the employee learned of the violation (challenging a dismissal has its own 30-day deadlines) (Art. 74).
3. Proof: the employee proves the actual amount — through the parties’ explanations, witness testimony, and written and physical evidence (Civil Procedure Code of Georgia, Art. 102); no piece of evidence, including the contract, has a predetermined force — the court assesses all the evidence together (Art. 105). Collect evidence of regularity: dates and amounts of transfers “from the director”, correspondence about salary, the job advertisement, payrolls, colleagues as witnesses.
4. Shifting the burden: a written demand (conciliation procedure) — if the employer evades it, the burden of proving the facts of the dispute lies with the employer (Labour Code, Art. 62). In court, request payrolls and cash records: if the employer, without a valid reason, does not produce a requested document, the court may place the burden of proving that fact on it (Civil Procedure Code, Art. 136). Before a dispute, the employer must issue, at the employee’s request, a certificate of employment with pay data (Labour Code, Art. 14).
5. Calculation: underpayment, compensation on dismissal and holiday pay are calculated from the proven actual amount; for each day of delayed payment — 0.07% of the delayed amount (Labour Code, Art. 41).
6. Taxes: tax not withheld from the salary paid, and the sanctions, must be paid by the employer as the income payer (Tax Code of Georgia, Art. 154); underpaid pension contributions must be paid by the employer from its own funds, without withholding from salary, plus a penalty (Law of Georgia on Funded Pensions, Art. 6). The tax side is handled separately, under the tax topic.
7. Where to apply: the employer — written demand; court — civil panel of the district or city court; non-payment of tax — Revenue Service.
8. Evidence: bank statements showing regular transfers from the director or third parties; correspondence on the salary amount; the offer, job advertisement, entries in CRM or spreadsheets, colleagues’ testimony; certificate of employment, official payslips for comparison.
9. Traps: signing a “no claims” receipt on dismissal without a reservation about the unofficial part; isolated cash payments without witnesses are almost impossible to prove — a system of evidence is needed; missing the one-year deadline by relying on the general limitation period of the Civil Code.

Be sure to check

• the “envelope” cash is also pay, but the contract amount is the starting point and the employee must prove the real amount
• how to prove it: transfers, correspondence, witnesses; requesting documents and shifting the burden of proof
• from the real amount — underpayment, compensation, penalty of 0.07% per day; claim period of 1 year
• tax and pension contributions on the unofficial part are the employer’s obligation