A new term appeared in our Modern Greek language of our Modern Greek crisis-hit country: the ‘invisible employee’. Who is the invisible employee who emerged from the Greek crisis and the skyrocketing unemployment? Oh, it is the employee who has a job but is not being registered in social security fund. It is the worker who has been hired by an employer but is being paid as free-lancer. It is the worker who works at full time job but is registered as part-timer.
The invisible employee is the one who has no right for holidays and vacation bonus (13rd and 14th salary), has no right for compensation is case of being fired, who has no right for vacation days, who doe snot secure years of work experience.
These are the cases that neither the employee nor the employer pay their share of contribution to social security funds
According to latest data published by the Labor Institute of Federation of Greek Workers (INE/GSEE)
500,000 people work under the ‘invisible status”
300,000 are de facto “employees” but are paid as “free-lancers”
The Ιnvisible Εmployee in practice
A friend of mine is one of these invisible workers. He has a full time job at a monthly salary of €1,200. Form the employer he receives net €900. Τhe three hundred euro are automatically deducted from his salary for taxes. The tax office calculates 26% tax from the first euro as he is supposed to be a ‘free lancer’ and not as ’employee’.
As the employer insists to be in conformity with the tax office and the Labor law (lol), this invisible worker- friend of mine has registered himself to the tax office and social insurance fund for free-lancers and self-employed(OAEE).
His monthly contribution to OAEE is €250.
From €1,200 gross, he receives in the hand just €650.
Next year, when he will be called for his tax declaration the tax office will charge him additional €650 ‘trade fee’ and additional €140 ‘solidarity tax’, that is additional taxes totaling €790. These two additional taxes are two of the so-called “emergency taxes” imposed by the Troika to save the country and the euro.
Tax & Contributions: free-lancer vs employee
Ηad the employer registered my friend as ‘employee‘ the tax percentage would be 22% ( that is €264 per month) plus a 10% tax return on the total annual income.
In terms of social contributions, my friend would pay just €160 per month, while the employer would have to pay his monthly share of €280. Yes, social security contribution for employee is 13.50% and for employer 24.46% of the gross income. A total of 37.96%!
Benefits for whom?
This practice has disadvantages not only for the ’employee’ who gets taxes as ‘self-employed’ but also for the social security fund of employees IKA.
On the other hand this practice has benefits for the employers who restrain from paying social security contributions, 13th and 14th salary, compensations etc. for their de facto employees.
And it has certainly benefits to the tax collecting offices.
Guess who are forming an unholy alliance here in this debt-ridden, recession and unemployment country!
Would I be right to claim that both the employer AND that state exploit the Greek employee and take advantage of the situation?
Nevertheless, this seems to be the future of labor conditions in broke Greece….
PS Another friend, a free-lancer, had an income of €300 in 2013. This year, the tax office asked him to pay €40 tax and ….€650 trade fee!!!
Visible domestic cleans up invisible workers