New measures to combat undeclared work in domestic services, Greece

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Country: 
Greece
Target Groups: 
workers/suppliersemployers/purchasers

For certain categories of migrant workers, the new institutional framework for migrant workers in Greece has introduced specific reforms which aim to make the renewal of immigrants’ residence permits easier and, at the same time, to combat undeclared work among such workers. In the case of domestic workers, at whom most of the reforms are targeted, the provisions of their social security system have paradoxically hampered efforts to limit undeclared work in this industry.

Background

Under current immigration legislation, the right to renew a residence permit and to thereby work legally in Greece depends directly on the ability to provide proof that the worker has completed a specific number of days of insurance (stamps) each year. Therefore, as well as submitting an application for the renewal of the residence card, each migrant worker must provide a certificate authorised by the Social Insurance Fund (Iδρυμα Κοινωνικών Ασφαλίσεων, IKA). This document proves that the migrant worker has accomplished a number of working days each year during the period of validation of their expired residence card. This number of days of insurance required depends on the specific professional category of the migrant worker (150,200 or 250 stamps per case).

While the general annual average required number of days of insurance amounts to 200 days, for certain categories of workers who have more than one employer – such as construction workers, private nurses and staff working at the employer’s home – the minimum annual period of insurance is 150 days. In addition, under the new legislative framework, the requirement that these categories must provide a written contract of employment with the employer in order for a residence permit to be renewed has been abolished. However, this requirement continues to apply for immigrant workers in all other economic sectors.

Nonetheless, if the migrant worker cannot provide evidence of the necessary number of stamps in each case, it is possible to purchase up to 20% of the total number of days of insurance required. These reforms were introduced through the following legislative provisions: the Ministry of Interior Law 3386/2005, under which a new institutional framework was introduced for immigration in Greece; and, specifically, under the Joint Ministerial Decision 160 of 3 January 2006, which specifies the terms for proving the number of days of insurance required to renew a residence permit.

A high proportion of female migrant workers are employed in the domestic services industry. According to expert analyses, over 200,000 women may be employed in this industry – which corresponds to about 50% of all female migrants employed in Greece and to 70% of all women working in the private household industry (National Statistical Service, second quarter of 2007).

Objectives

The main aim of the new legislative regulation introduced by the Ministry of the Interior (Law 3386/2005) is to make it easier for female migrants employed at the employer’s home to renew their residence permits. At the same time, it seeks to directly and indirectly limit undeclared work, given that an immigrant worker without a valid resident permit can only work on an undeclared basis.

Specific measures

Under the new legislative framework, a number of specific measures were introduced to help reduce the level of undeclared work, more specifically by:

  • reducing the annual number of days of insurance required;
  • making it possible to purchase up to 20% of the days of insurance required;
  • abolishing the requirement for a written contract of employment.

Evaluation and outcome

Achievement of objectives

Unfortunately, a statistical overview of the effectiveness of the new measures is not feasible, as no sufficiently advanced system is available for recording qualitative data on the insurance of employed persons in Greece. Therefore, it is only possible to estimate the overall success of the recent measures by using past qualitative records.

Obstacles and problems

Ironically, as the new regulation reduces the number of days of insurance required, the extent of partially declared work has increased. This is because the financial burden of full insurance is particularly heavy for women earning about €40 for a full day’s work (7–8 hours). Thus, at best, they try to use their own resources to secure the number of days of insurance needed to renew their residence permit – that is, 150 days of insurance or about 13 days of insurance a month – although they usually work more than 25 days a month.

Furthermore, another recent study found that 37% of women migrant domestic workers state that they are completely uninsured.

Lessons learnt

The new measures seeking to combat undeclared work must be accompanied by tax or other incentives, so that private household employers can be encouraged to assume the employer’s share of the social security costs of the domestic workers they employ. Otherwise, the current system – which makes the renewal of residence and work permits, directly linked to proof of a specific number of days of insurance on an annual basis, the responsibility of the employee – will end up reinforcing the level of partially and fully undeclared work; in other words, the latter will increase as the number of stamps required is reduced.

Transferability

This system would be difficult to transfer to other countries.

Commentary

Female domestic workers are mainly employed in childcare due to a lack of places in state nurseries and in care of the sick or elderly as a result of the lack of beds in state facilities. Employment at the employer’s home therefore fills a gap in the social welfare system in terms of care and treatment structures and services. Consequently, the lack of a link between the social security contributions and entitlements of private Greek households in the country’s underdeveloped social security system shifts the financial cost of social welfare, which people ought to enjoy free of charge, directly onto them. The employers of female domestic workers are, for the abovementioned reasons, mainly from middle to low income families. These employers find it equally difficult having to assume the financial burden of employer contributions in respect of domestic work/provision of care.

Bibliography

Kapsalis, A., Women’s migration and employment in Greece, INE/GSEE-ADEDY newsletter, Issue 131, 2006.

Maratou-Alipranti, L. and Gazon, E., Immigration and health and welfare, National Centre for Social Research (EKKE), 2005.

Research Centre for Gender Equality, Women’s migration and employment in Greece, 2007.

Apostolis Kapsalis, Labour Institute of Greek General Confederation of Labour (INE/GSEE)

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