July saw entry into force of Tax Board decision prescribing that entrepreneurs register all their workers. Among others, seasonal labour force, one-day-helpers and free-will «bees» must all be entered.
Farmers furious at requirement to register all hands
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«This is the dumbest thing ever invented,» master of the Marjamaa farm Tõnu Oks denounced the decree. In his opinion, Tax Board is doing this under pressure by government – how else could the latter keep their generous promises.
Mr Oks’ farm has 28 hectares under berry plants, teeming with raspberries, strawberries, blackcurrants, cranberries, cowberries, and sea-buckthorn. Pragmatically speaking, the farm’s location isn’t the ideal – it’s Haaslava Commune, one with fewer than 2,000 inhabitants, of whom lion’s share are pensioners. There, working hands are hard to find. The nearest bus stop is 3 kilometres away.
The eager ones do come by bys, to help Mr Oks. Early morning they show up, walk the kilometres, and repeat the trip at night. For that, they get minimum wage and, if the season’s good, a bit on top of that.
Officially, Mr Oks is a self-employed person – the FIE. The man has six regular workers. In summers, however, more helping hands are needed. All of these are to be registered. Every night at 5 pm it is seen how many are needed for the next day. He pulls out the list and starts calling them over the phone. Some can come, some cannot.
From now on, everyone needs to be inquired the identification code (ID), have a separate labour contract entered, and the names typed into workers register. And so every morning.
According to Tax Board press rep Uku Tampere, farmers need not worry: a worker can also be registered by telephone call or text message. Straight from the field, if need be. As explained by Mr Tampere, seasonal workers may be registered for longer periods of time. Meanwhile, they can be paid according to work-hours.
According to Mr Oks, however, it is difficult to register people for a longer period of time. A berry farmer won’t know, exactly, if and when he needs a helper. As an example, he points to student summer brigades – the malev or EÕM. A contract with EÕM had to be entered in the winter. At the moment, he is assisted by 24 EÕM youth from Tallinn. For many berry growers, early contracts may prove a problem. «The berries behaved not according to plan,» said Mr Oks. Some years, they are hard pressed to find the students something to do.
For the most part, paid summer workers are from the ranks of the insolvent. Some live on welfare. Some are available as servants for any tiny money. Some are weaning themselves from the vodka bottle to get a piece of bread. There are also the low-paid workers who take out a vacation to go pick berries. All for the sake of having a little extra cash.
Registering being easy, what does it alter? «Asking the identification code frightens the folks,» said the farmer. In summer seasons, the helper army is also made up of the less-educated and the down-trodden...
Not easy to convince people like these that asking identification code won’t change a thing. When it comes to bureaucracy, they are sceptical, suspicious and distrustful. And it is difficult as it is to come and work at the Marjamaa farm – due to location, scarce transportation, the nature of the tasks, and the low pay. «Now we are like: I ask the identification code and beep-beep, they hang up,» relates Mr Oks.
Why then don’t you pay more, I ask Mr Oks. The man is trying to pay some extra on top of minimum wage, but it ain’t easy. He shows me the Marjamaa farm preservative-free juices. As early as in 2011, they asked over €6 for these in the stores. The farm gets €1.50 per bottle. A euro of that is spent on bottling. Profits are meagre. He does pay the workers premiums, but that within means.
The Tax Board idea is a noble one. According to predictions, €10m of yearly income will be collected thereby. A large percentage of undeclared «envelope» wages is observed in construction, accommodation, and catering. Isn’t that a problem, Mr Oks?
«It is,» he agrees. Mr Oks supports fighting envelope wages. Even so, he does not think all companies can be treated the same. Hearing of the taxman claim that registering workers will reduce an entrepreneur’s administrative load, Mr Oks roars with laughter. Administrative load is not lighter, you see, if a man has to print a dozen names and identification codes into a computer, every morning.
When paying premiums, some contracts have to be added extra numbers. Quite a bother. Farmers have no separate accounting departments or chiefs of staff. A farmer does it all. They can’t hire a specialist who would explain the seasonal workers: registering you won’t change anything, this is just formality. Fears are hard to mitigate. A low-pay self-made chief of staff can’t be hired – on paper, all data needs to be correct; therefore, the very Mr Oks is in charge of the bureaucracy.
For avoidance of the duty to register, a self-employed FIE may be fined up to €1,200. According to the master of Marjamaa, he doesn’t need too many helpers this year so the bureaucracy is bearable. Even so, in the busy years paying the fine might be an option. Diligence with the red tape thing might prove costlier than paying the fine.
Since July, self-employed persons will also need to register the bee people – talgulised. As voluntary workers. This kind of work Mr Oks does offer as well. Some are asking: can I come and help out, and get a kilogram or two of raspberries in return? He has nothing against that.
Is it legal to offer them dinner and beer, as a thank-you? Taxman’s press rep says that’ll be okay. With a symbolic pay, they will have no problems. Even so: should a person be offered financial income, tax liability results. Give’ em beer, not coins to go buy it...
Register eases employers’ administrative load
The aim of the register is cutting envelope wages. The other goal is creating a «common window» for employers to communicate with the state. The register helps employers cut administrative load as state agencies will get information on them from a single database.
It is the state’s responsibility to see that data reach agencies in time. With the new register, information on registration of work will be accessible on day one. Thus, an employee may see for himself if his employer has registered his work, paid the taxes and he therefore eligible for social security.
The neighbouring Finland and Sweden already using such systems, we followed the example and, in cooperation with other state agencies, developed a system best suited for Estonian circumstances and our state agencies. Also, we were guided by the principle of easing entrepreneurs’ administrative load.