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Labor Ministry to reduce fines for undeclared work, raise minimum wage

Fines for undeclared work will be reduced in order to create incentives for full time jobs, Labour Minister Efi Achtsioglou revealed right after Christmas.

In an interview with the Athens-Macedonian News Agency (ANA), Labour Minister Efi Achtsioglou revealed plans to overhaul the architecture of the fine system for undeclared labour and contribution evasion, including the option of halving fines for companies that subsequently hire staff on a full-time basis.

“The question for us is not confined to the amount of the fine but also to the logic behind it, because the aim is to eradicate undeclared labour and not just to collect fines. In this light, we are proceeding to completely overhaul the architecture of the fine. Specifically, if a company caught with an undeclared employee then proceeds to hire that employee on a full-time employment contract, the fine will be significantly reduced, up to 50 pct. Apart from the fine, however, the company will be obliged to pay social insurance contributions for the employee,” she said.

According to Achtsioglou, the combination of the two measures seeks to deliver justice for undeclared employees.

In the case of repeat offenders, however, the fines will become even progressively stiffer from a financial point of view and the companies involved will additionally face other sanctions, including a temporary closure of the business as voted by Parliament in September.

Achtsioglou also announced the launch of significant programmes to boost employment among young people in the first few months of 2018, such as a programme supporting the first hiring of a salaried employee by companies of young people up to 35 years old or a programme to subsidise the hiring of 10,000 individuals aged 18-29, as well as actions to support entrepreneurs in the same age group.

The minister outlined the key elements of a new settlement scheme for debts to social insurance fund with up to 120 installments, saying a ministerial decision will be issued within the week and cover debts created up until December 31, 2016. In addition to repayment by installments, with a minimum payment of 50 euros per month, the measure also envisions the write-off of up to 85 pct of fines and interest payments and enables the debtor to obtain proof of being up-to-date with social insurance payments.

On Wednesday, Minister Achtsioglou revealed also that one of the government goals in 2018 is to raise the minimum wage. However, the minister did not elaborate about the new minimum wage cap, when she spoke to Sto Kokkino FM.

Minimum wage was reduced from 780 euro gross to 580 (510 for workers below 25 years old) in 2012 after pressure by the country’s lenders. the aim was allegedly to increase competitiveness.

Undeclared and underpaid  worker seen on a Greek island last summer.

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