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Vouchers instead of retirement securities for domestic servants in Greece

28 June 2011 / 13:06:07  GRReporter
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Domestic servants and seasonal agricultural workers will be able to work and will have paid securities in Greece and the procedure is significantly easier for both employers and employees. According to the data of the Ministry of Labour, over 300,000 Greeks and foreigners are working in agriculture or as domestic staff in the houses of affluent citizens. They receive a salary, but it is not accounted anywhere and as a result the state and social security funds in particular lose billions of euros annually.
 
According to the Labour Inspectorate, every one out of three employees works informally and receives a salary but pays no taxes, no health and pension securities. According to the Professor in Economics Nicholas Travlos, the informal economy turnover is significantly higher than what the official figures of the government show. He said early in the year that its size in 2009 is between 30% -40% of the GDP, which resulted in a loss of 15 billion euros in unpaid taxes.

The Minister of Labour and Social Security George Koutroumanis signed a ministerial decision according to which the new system should come into force by the end of summer. It will introduce labour vouchers that will be obtained from banks or post offices in the country against the amount of the remuneration and the relevant securities. Then, the employee will be able to cash the labour voucher following the procedures similar to cheque cashing and will receive the remuneration amount after the social contributions are deducted. If the employee does not cash the labour voucher within four months, the money goes to the state.

This type of employment relationship allows the employers and employees not to go in a hard bargaining procedure for the services rendered. Labour vouchers apply for occupations like housemaids, gardeners, nannies, nurses’ care for sick people, small repair services, beauty treatments at home as well as seasonal agricultural workers. Thus, the government made a major step in tackling the long-standing problem of employment of immigrants who, because of technical difficulties in the administration, often remain outside the social security system, regardless of their long years of service in Greece.

The labour vouchers are also suitable for part-time employees and for those who have more than one job. The main benefits for the employees who are paid with labour vouchers is that they will not lose years of unsecured service, which they can not prove later for the calculation of the years for retirement. It shall enter into force from September this year and will apply anywhere in Greece.

The main objective of the new system of payment is to accumulate a part of the turnover of the informal activities in the country. Thus the government hopes to support social security and pension funds, which are experiencing significant difficulties in this period and the state is paying the pensions mainly through the aid granted by the European Commission, the European Central Bank and the International Monetary Fund.

Tags: EconomyMarketsSocial security systemGreeceCrisis
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