Undeclared labor causes State Budget losses of billions

Annually, over 9 billion lei do not reach the State Budget, and over 4.7 billion lei do not reach the budget of social insurances, as a result of undeclared labor and “envelope salaries”. The estimations were presented on Tuesday, August 14, by Labor, Social Protection, and Family Minister Valentina Buliga, at a press conference, reports Info-Prim Neo. The new amendments to the Labor Code and Administrative Code have become effective on August 3, current year, increasing the fines for violating Labor Law, including the pay of “envelope salaries”. According to Valentina Buliga, it is the responsibility of everyone to refuse to work without a contract, and accept a salary smaller than the one in the real sector. The amendments to the Labor Code clearly define the notion of “undeclared work”, thus assuring a harsher approach towards those who violate labor legislation, mentioned Valentina Buliga. The Minister of Labor added that these amendments will determine employers to take greater measures in assuring uniform application of the provisions of the legislation on employment, salary pay, security and healthcare in labor. Meanwhile, the Minister mentioned that the highest employment rate is registered in constructions, at 55.2%, in agriculture - 46.7%, and in commerce, hotel and restaurant businesses – about 34.5%. Every fourth employee of agricultural enterprises is working illegally, and in constructions, hotels and restaurants industry – every fifth employee. “Every time we have a problem we remember that the State is supposed to help us. Otherwise we often forget that we are the State, we – the citizens of this country, and we live according to how we build it. I believe that every citizen must take a stand. The behavior of each of us should be the expression of a just attitude, which would balance personal interest with the interests of the masses. This is the only way the undeclared labor phenomenon can be combated”, stated Valentina Buliga. Labor Inspection Chief Dumitru Stavila mentioned that the undeclared labor phenomenon, the “envelope salaries”, the covering of income – all together force our country to dwell in poverty. It is the duty of each to fight these phenomena, and the sanctions introduced for undeclared labor and unofficial salaries are meant to discipline employers. Referring to the fact that previously the efficiency of combating “shady” labor was negligible, Stavila stated it was due to legislation’s vague determination of what “shady” labor was, and that the fines for it were in the range of 1000-1500 lei. After this year’s amendments, legal entities will pay a fine between 7,000 and 10,000 lei for each illegal employee, and the persons with responsible positions will have to pay between 5,000 and 7,000 lei. Additionally, employers who hire minors for life and health-threatening jobs will be fined for up to 10,000 lei. The new amendments to the Labor Code stipulate that employees who accept to work without a labor contract may be fined for up to 3,000 lei.