Increasing Fines for Absence of Labor Contracts Will Decrease Loses of Azerbaijani State: Expert
Azerbaijan, Baku / Trend / It is possible only to support the amendments to the Tax Code of Azerbaijan with regards to the fines for hiring workers without concluding labor contract. This step is the direct measure to prevent non-payment of taxes and protect rights of workers. Indirect steps were to increase the minimal amount of the salaries, decrease the rate of social taxes, co-ordinate salaries with the pensions, etc.
The amount of the fine suggested by the Government for each worker without labor contract totals AZN 1000 ($1250), ten times increase from the current amount of the fine (AZN 77-99).
The guilt for the absence of the labor contract in the Azerbaijani enterprises falls both to employee and employer equally. In addition, both sides become victims of this situation. Under the conditions of keen competition in the labor market, the selected candidate for the job is firstly interested in the offered position and amount of salary. In most cases, the future workers do not think if their labor relations have been legalized duly. The reasons of neglect may be various: firstly future workers' intellectual darkness of their rights. The absence of the labor contract transforms the workers into disfranchised employees.
Such workers are always risky for dismissal and have not an opportunity to receive social insurance or allowances in case of trauma or professional disease which often takes place in the construction sector. In addition, they may be deprived of receiving age pension. According to the new convention of the pension reforms, exact links will be established between the pensions and payments of the social insurance fees in the period of labor activity.
Secondly even being aware of their rights during labor establishment, the workers wittingly refuse to be registered as employee of the company or payer of the social insurance. Having key official jobs, for the purpose of additional earnings, the people organize additional employment and try to hide their profits on it.
However, concluding labor contracts with the workers and officially register them is not beneficial for the employers due to the responsibility of ensuring security rules in the work place and high rates of social insurance transferred to the State Social Protection Fund. Currently the rates of transfers for the obligatory social insurance make up 25%. 22% are transfers made by employers from the salary fund and 3% - money stopped from the salaries.
(Ellada Khankishiyeva - expert of Trend analytic center).