ECONOMY

Creditors asked Labor Ministry to double illegal worker fine

creditors-asked-labor-ministry-to-double-illegal-worker-fine

Technical experts of the country’s creditors have asked the Labor Ministry to double the fine for undeclared labor from the current 10,550 euros to over 20,000 euros per uninsured worker.

The demand – which the ministry has rejected – was made in the context of the signing of a memorandum of cooperation between the creditors and the Labor Inspection Squad (SEPE), with the participation of the International Labor Organization (ILO).

The ministry presented a set of measures for combatting undeclared labor, including a new set of fines whose level will depend on the magnitude of violation, as well as strong incentives for the compliance of employers.

SEPE Special Secretary Yiannis Soukos said that in the context of locating the root of the problem and of drafting an integrated action plan against the phenomenon, the ministry is examining proposals that would both prevent and intervene in undeclared labor, with the most successful action proving in practice to be the conciliatory process.

Well informed sources say that proposals include the increase of fines in cases where there is a repeated occurrence of undeclared labor, while penalties will be associated with incentives for employers to hire the undeclared employee legally.

The new general fine is planned to come to almost 3,500 euros but will vary according to number and the share of undeclared staff identified in a company, the frequency of violations identified in the same enterprise and so on.

Today the fine imposed amounts to 18 times the level of the minimum monthly salary, i.e. 10,550 euros. SEPE officials deem it particularly heavy for enterprises and practice has show that only 18-20 percent of such fines imposed are actually collected, amounting to some 70 million euros per year. The rest turns into expired debts, most of which end up in court, with hearings taking as long as 15 years.

However, creditors rejected the ministry’s proposals and have asked for the fine to be twice as high, an idea that has, in turn, been rejected by the Greek side.