According to the Chamber, the planned amendments to enforcement proceedings will only partially reduce employers’ administrative burden

The Estonian Chamber of Commerce and Industry submitted its opinion to the Ministry of Justice and Digital Affairs on the intention to develop a draft act amending the Code of Enforcement Procedure. Although the Chamber supports the aim of making the procedure for enforcing seizure of a debtor’s income easier for employers, we pointed out that the proposed amendments would only partially reduce the administrative burden on businesses and would instead introduce new obligations in some respects.

The proposed amendment would reduce employers’ burden only partially

Under the intention to develop a draft act, employers would in future be released from the obligation to comply with an instrument ordering the seizure of wages where the wages are paid into an account opened in Estonia with a credit institution or payment institution in the debtor’s name. The Chamber supports this solution because it would help reduce employers’ administrative burden.

At the same time, the employer’s existing obligation to comply with the seizure instrument would remain where wages are paid into an account belonging to a third party or an account in a foreign country. The Chamber considers that, in such a case, the aim of reducing the administrative burden on businesses would not be achieved, because the employer cannot influence the account to which the employee wishes to have their wages paid.

In the Chamber’s view, complying with one wage seizure instrument takes on average approximately 3.4 hours per year, at a cost to the employer of approximately EUR 57 per seizure instrument. Given the number of seizure instruments issued each year, the total cost to employers amounts to hundreds of thousands of euros.

The Chamber proposed several alternative solutions

The Chamber proposed extending the planned simplification to situations where wages are paid into a third party’s account or an account in a foreign country. To this end, the Chamber proposed several possible solutions.

For example, the bailiff could calculate the amount to be seized and inform the employer only of the amount to be transferred to the bailiff. Alternatively, the employer could transfer the entire wage payment to the bailiff’s account, with the bailiff making the necessary deductions and transferring the non-seizable portion to the employee. Another option would be to consider a solution under which, where wages are paid into a third party’s account, the employer would provide the bailiff only with the account details, and the bailiff would organise the subsequent seizure in cooperation with the bank.

A new notification obligation would increase businesses’ administrative burden

In addition, the intention to develop a draft act provides for a new obligation to notify the bailiff of the account to which wages are paid and to notify the bailiff of any change to the account. Failure to comply with this obligation could result in a coercive fine.

The Chamber does not support introducing a new notification obligation in this form. In the Chamber’s view, this would increase businesses’ administrative burden and is not sufficiently justified, particularly in situations where the employer would in any event remain obliged to comply with the seizure instrument.

In the Chamber’s proposal, the notification obligation should apply only where wages are paid into an account opened in Estonia in the debtor’s name and the employer’s release from the obligation to comply with the seizure instrument depends on this. An even better solution would be for the necessary information to reach the bailiff automatically through banks or the enforcement register, without creating additional obligations for the employer.

The intention to develop a draft act amending the Code of Enforcement Procedure can be viewed here. Under the intention to develop a draft act, the draft act is expected to be completed in the second half of 2027 and the amendments would enter into force in 2028.