Every year around 80,000 Serbians find themselves in a field, orchard, farm or greenhouse, performing agricultural work as a seasonal labour force. For some this serves as a side job, while others see it as their only source of income. What all of them have in common is that their work goes unregistered
Agricultural employers cannot live without this labour during the high season, but the complicated registration procedure has directly encouraged them to take the risk of informal employment. The process of registration is soon followed by another to unregister seasonal workers engaged under contracts of temporary or periodic employment. Avoiding these demanding procedures leaves the state deprived of significant tax revenue, while most harm is done to the workers who end up with no pension contributions nor health insurance in case of occupational injury. Not being registered, they can also find it hard to obtain legal protection if they encounter problems with their employer.
According to research performed by NALED, up to 67% of Serbians would not report an employer who keeps them in the black market, the dominant reason being the fear of losing their jobs.
On the initiative of NALED members directly interested in finding a solution to this problem, we reached out to the government and initiated the drafting of a law that would simplify the procedure for hiring the seasonal labour force and stimulate employers to register workers. We encountered an open door, and the adoption of the law on seasonal workers in agriculture was soon included as one of the measures of the National Programme for Countering the Shadow Economy, developed under NALED’s coordination.
We encountered an open door, and the adoption of the law on seasonal workers in agriculture was soon included as one of the measures of the National Programme for Countering the Shadow Economy, developed under NALED’s coordination
Over the past year, we have organised study tours to Croatia and Hungary for the civil servants whose work this affects, to give them an opportunity to learn first-hand about solutions implemented in this field by our neighbours.
Croatia applies a model by which employers can buy daily vouchers for hiring seasonal workers. Each voucher purchased includes paid contributions for a single worker for one day, and the employer is further obliged to pay taxes at the end of each month. Every morning, the employer sticks a voucher in a booklet owned by the worker, as proof to the inspection authorities that the required contributions have been paid. Hungary has gone a step further, enabling employers to register workers electronically, or even by phone, which further simplifies the procedure and reduces employers’ expenses.
According to government and ministry plans, the law should be adopted by the end of this year. It will regulate the status of seasonal agricultural workers as one of its essential priorities. The workers will be registered and their time of service recorded, giving them the right to a pension and to insurance in case of occupational injury
NALED is participating in broader consultations for drafting the law. It is cooperating directly with the Ministry of Labour, which is responsible for adopting such regulations, and with the Ministry of Agriculture, Ministry of Finance, Tax Administration and other institutions that take part in its development.
A working group has prepared a draft law and is currently working on its improvement and modernisation in line with the model applied in Hungary. An evaluation is being made of the abilities and technical capacities of Serbian institutions to implement a more advanced model of the law that will define a simpler way of registering workers, more accurate records and more efficient inspection.
Furthermore, there are consultations taking place with authorities on the level of taxes and contributions, and on the possibility of enabling people who receive some sort of social assistance to engage in this type of work without losing their rights.
According to government and ministry plans, the law should be adopted by the end of this year. It will regulate the status of seasonal agricultural workers as one of its essential priorities. The workers will be registered and their time of service recorded, giving them the right to a pension and to insurance in case of occupational injury.
With businesses estimating the number of undocumented seasonal workers at around 80,000, we have high expectations of this Law to counter the shadow economy in the field of agriculture.
According to NALED’s surveys, businesses indicate agriculture as the eighth largest sector in the scope of the shadow economy. When the law is adopted, they will no longer have an excuse to ignore the regulations.