A bill approved by the Council of Ministers on 27 May and submitted to parliament sets an upper limit on the increase of administrative fines imposed for undeclared work in cases of late payment.
The aim of the bill, as stated in the explanatory report, is to amend the Social Insurance Law so as to introduce a ceiling on the increase of administrative fines imposed for undeclared work when payment is delayed.
Specifically, the bill provides that the increase of an administrative fine, due to delayed payment by employers or self‑employed persons, cannot exceed twice the amount of the original fine. In other words, the total fine will not surpass the sum of the initial administrative penalty plus an amount up to double that figure, in line with provisions already applied under the 2020 law establishing the Labour Inspection Service. According to the current legislative framework, where employers or self‑employed individuals fail to pay an administrative fine for undeclared work on time, the amount increases by €50 for each day of delay.
As a result, a significant number of employers and self‑employed persons who did not settle their fines within the prescribed timeframe have accumulated very large debts to the Social Insurance Fund since the relevant amended legislation came into force in 2017.
Furthermore, under the existing framework, the Social Insurance Services have filed civil actions before district courts to secure court judgments and orders against both legal and natural persons regarding outstanding amounts linked to administrative fines for labour‑related violations.
Significant reduction in outstanding amounts
According to the data presented, for a total of 827 employers and self‑employed individuals, the initial amount of fines for undeclared work from 2 June 2017 to date stands at €2.5 million, while the amount owed—after the imposition of the €50 daily surcharge—rose to €65.6 million.
With the implementation of the proposed regulation, the outstanding amount would be reduced to €7.9 million.
Because the proposed legislative change has implications for public finances—specifically revenues of the Social Insurance Fund—the views of the Ministry of Finance were sought, which raised no objection to the implementation of the proposal put forward by the Ministry of Labour and Social Insurance.
It is noted that members of the Social Insurance Council have been informed about the proposed bill.
In addition, the matter was discussed before the Labour Advisory Board on 6 April, whose members agreed with the proposed legislative regulation. Finally, the bill was also posted on the e‑consultation platform, without any comments or questions being submitted to the Social Insurance Services.
