When Minister of Labor Marian Jurečka (KDU-ČSL) started talking about the registration of contract workers, he connected it with the issue of increasing the limits for levies from these types of flexible working hours. After a few months, the situation looks different. The limits are not to be increased, but on the contrary de facto tightened, but the evidence as part of the consolidation package went to the Senate. In the debates about the unprecedented tightening of labor law and the increase in administration, however, another aspect, with which Minister Jureček defended the records, was somewhat lost. Another tool to check applicants for social benefits. The Senate is supposed to decide this week.
In the government, the People’s Party has appropriated the traditional theme of the fight against the abuse of social benefits, and their chairman and minister Marian Jurečka is preparing new tools for this. Hand in hand with the new authority to break bank secrets for the Ministry and labor offices, the way of which was “glued” into the amendment to the State Social Support Act raised the eyebrows of organizations dealing with the protection of privacy and personal data (we wrote more here), officials are to receive the records of all people workers on work execution agreements.
The amendment is part of the so-called consolidation package, which changes six dozen laws and, according to the government, is supposed to enable the recovery of the state budget. Employers should report all employees on work performance agreements to the Czech Social Security Administration so that the new obligation to pay taxes in the chain of contracts with multiple employers can be checked. However, the data should not only go to the CSSA, but also to the labor offices.
First in line in this regard were Ukrainian refugees, whose work on an agreement began to be registered by the social administration since April. Employers report employees and contractors with visas to it for protection. The office then keeps the workers in the health insurance register. According to the proposal, employers will have to notify the authority of the amount of the contractor’s earnings for the given month, regardless of whether he is obligated to pay contributions.
In turn, the administration should inform all of the contractor’s companies if his income exceeds the limit, so that the levies are paid. The worker must tell the company where he works everywhere according to the agreement. There are fines for breaking the rules. The social administration will be able to pass on the data to the labor inspection or labor offices. Officials who process benefits should thus obtain information about the amount of the agreement holder’s income when assessing the right to aid from the state.
What is supposed to serve as a tool to collect higher taxes from agreements, can probably serve rather precisely to control applicants for benefits. That is, if they don’t move to work illegally. In the case of higher tax collection, there are strong doubts both on the part of employers and some experts. Employers announced long in advance that the changes – coupled with the strengthening of agreements by an amendment to the Labor Code – would cause them so much administration and problems that they would start backing away from them.
In some cases, this already happens before the approval of the consolidation package. As Daniel Hůle, an expert on social issues of People in Need, pointed out, for example, some contractors are already learning from employers how to arrange other types of employment, such as working on a trade certificate. “As a result, the state will see even less than it had in tax from the DPP,” stated Daniel Hůle.
“In the current situation, none of the employers can imagine the administrative burden, nor how it will be possible to monitor everything. The law does not allow us to tax in advance, the employee does not even have to know that, for example, when two agreements are in place, he will reach an income above the limit. , will eventually exceed it and reach more than 40% of the average wage, he will have to report it, one wage will already be deducted,” said Miroslava Tomášková, managing director and tax advisor of KODAP City, in an interview with Echo24.
According to her, the employer has no idea how much the employee will earn at another company, so it will often happen that the employer will receive a request to pay contributions even after a year. “The employee does not have to be with him anymore, they are mostly short-term jobs, it may happen that the employer will have to pay contributions for the company as well as for the departed employee. We don’t see a way to get the employee out of it,” Miroslava Tomášková added to the problems that the changes are supposed to bring.
In the program statement, the government promised changes in the social benefits system, and Minister Jurečka promised to revise the system in such a way that it “no longer has room for abuse”. Previous governments also promised to revise the benefit system. Their ministers also spoke about the abuse of subsidies. However, experts on social issues have long denied that benefits are abused on a large scale.
According to data from the statistical office, in 2020 workers had roughly 1.5 million DPPs. Last year, the number rose to 1.8 million. The resort stated that, according to statisticians, levies are not paid on more than 50 billion crowns of contractual earnings. The social insurance system thus loses approximately 15 billion crowns, according to the Ministry of Labour. The statisticians were based on work reports and employers’ reports on paid remuneration for hours worked, as well as data from tax authorities on tax deductions.