The Ministry of Labor unveiled today a ministerial decision to introduce a new system of imposing fines for undeclared and uninsured employment, in response to the documented high rates of criminality.

According to the Labor Inspectorate’s (SEPE) data there has been a sharp increase in undeclared work; in 2010 the increase was estimated to be 25%, in 2011 it was 30% and in 2012 38.2%. During the first half of 2013 the increase was estimated to be 38.4%.

The data is relative since inspections are performed if there is specific information or a complaint filed against an employer. The Labor Inspectorate, IKA’s Insurance Inspection Agency and the Economic Police have been conducting investigations all over the country, which are expected to last until the end of September.

The mixed-agency inspections are mostly focused on sectors with a high rate of criminality, with coastal and mainland areas with an increased tourist activity being prioritized.

The Minister of Labor Yannis Vroutsis announced that the fine for each employee will be 10,550 euros, about 18 times the minimum wage. Mr. Vroutsis explained that the intention of the fines is to make uninsured and undeclared work unprofitable for employers.

The Minister defended the sharp increase of fines by claiming that the problem is so widespread, that there is little incentive for any change. These fines will be imposed immediately and on the spot by inspectors, with the aid of the Ministry’s information systems and network.

The full ministerial decree is available (in Greek) here.