Bringing back seasonal workers to legal flows

In Serbia, there are between 65,000 and 76,000 workers hired for seasonal work in agriculture. Even though they are obliged to sign a contract on occasional and temporary jobs, this most commonly does not occur in practice. According to the Tax Administration’s data, only 3,500 seasonal workers had a signed contract in 2017, which means that around 95% of them go unregistered and are not entitled to any labor-related rights. When a breach occurs, the employer and the worker “resolve” the situation by paying an extra one or two day’s payment, to avoid the call to inspections.

The practice of non-registering seasonal workers was largely influenced by the complicated procedure for their engagement and a high share of taxes in the overall cost. NALED’s analysis has shown that a 20-day engagement of a single worker requires the employer to spend five hours for the registration and un-registration. The taxes and contributions for this period would amount to approximately 10,200 RSD.

For several years back, the businesses and NALED have been nominating a recommendation within the Grey Book to simplify the procedure and reduce the costs, and hence create an environment which would motivate the employers to comply with regulations – a practice that has already been successfully performed by our neighboring countries such as Croatia and Hungary. This inspired the Working group for drafting the Law, bringing together the representatives of line institutions, unions and NALED, to reach an idea to replace a formal agreement with an online application through e-portal.

The electronic application will last less than 10 minutes. The cost of taxes and contributions will be determined as a fixed sum and amount to around 6,000 RSD on a monthly basis, which is approximately by 30% than now. A seasonal worker will be entitled to pension and disability insurance and insurance in case of injuries, and will not be erased from the registry of unemployed persons, thus losing the right to social care and support.

The adoption of the Law on simplified work engagement on seasonal workers is one of the key measures of the National Program for Countering Shadow Economy. The regulation was adopted in the Parliament in late June and the required software, whose development is supported by the German Development Cooperation, is currently ongoing. We reached a solutions which, according to NALED estimates, could bring back around 33,000 workers to legal flows in the following five years, thus increasing the budget revenues by ca. 15 million EUR. The next step to be taken is the establishment of service centers in  local governments to support the farmers in implementing the new procedures, accompanied with trainings for businesses-employers and line institutions.

 

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