The parliament unanimously approved legislation yesterday to strengthen penalties against undeclared and under-declared employment, marking a unified approach between executive and legislative powers.
The new framework, which will come into effect upon publication in the official gazette, doubles administrative fines for undeclared work and introduces mandatory electronic registration of private sector employees and their employment terms.
Under the revised legislation, the administrative fine for each undeclared employee has been increased from €500 to €1,000 per month when a violation is discovered, regardless of whether the employment was illegal.
Repeat offenders face escalating penalties, with fines rising to €2,000 per undeclared worker for a second offence and €3,000 for subsequent violations within a two-year period.
Initial plans for fixed penalty notices were withdrawn following legal concerns and objections from employers’ associations.
The electronic registration requirement, originally intended to be implemented by ministerial decree, has been incorporated directly into law.
The Labour Committee’s explanatory report states that employers must now record employment terms in an information system, with the Labour Minister retaining authority to regulate procedural aspects through decree.
According to the Labour Minister, undeclared and illegal employment costs the Social Insurance Fund approximately €10 million annually in lost contributions.
