ECONOMY

Blow against fake furloughs

Change to mechanism for contract suspensions prevents employers from abusing the system

blow-against-fake-furloughs

The Labor Ministry’s decision to change the declarations of workers on furlough has put up a barrier against a new form of undeclared labor that recently swept the market.

Provisional data from the ministry’s competent departments showed that in February – when the system changed, forcing employers to declare the suspension of labor contracts in advance on the Ergani database – there were 75,000 fewer employees declared as on furlough.

This means that there was a 10%-12% reduction in the number of workers on furlough last month compared to January, without any significant changes in market conditions or the sectors forced to close. If anything, the measures have been tightened, not relaxed over the past month.

Consequently, on Friday the state will pay out the special compensation of up to 534 euros to about 548,000 salary workers. The final picture will become clear in the coming days, as the competent agencies of the ministry will clear out the lists of recipients by deducting the workers with double employment. In any case, the list of recipients will this time be considerably shorter than that of January, when 623,557 employees received the special-purpose compensation.

The problem of declarations of contract suspensions being made later has been on labor market experts’ radar for months: This is because many employers declared that they had suspended the contracts of certain workers while forcing the same individuals to continue to work, either from their workplace or from home.

The abolition of that practice and forcing employers to announce contract suspensions in advance has effectively dissuaded a number of employers from repeating the declaration of fake furloughs, as well as allowing the Labor Inspection Squad to perform spot checks.

Minister Kostis Hatzidakis told Kathimerini that the decision to change the system was based on the government’s aim to support those enterprises that have indeed suffered, as well as their employees, while at the same time showing respect for taxpayers’ money.