Employers will go to prison because of moonlighting

Author: Snježana Karić

'One of the future measures of the Government of Republic of Srpska aimed at suppressing the grey economy and unreported employment will be prosecution of employers found to have unreported workers', stated Prime Minister of the Republic of Srpska Radovan Višković in an interview with EuroBlic noting that this measure has already caused a stir among the members of the parliament but would not make him change his mind.

Do you plan to amend the RS Criminal Code?

Yes, we plan to enact changes to the Criminal Code and declare moonlighting a criminal act and prescribe imprisonment for it. The financial fine will remain BAM 2,000 for every unreported worker, but in addition a criminal report will be filed against the employer who could face a prison sentence. I think that at least 30 percent of employers who have workers that are not reported, will immediately report them.

In your keynote address, you underlined the need to combat grey economy especially the part where some employers pay only a minimum wage to their workers according to the papers but the rest of the salary is paid off the record directly to their hands. How to deal with this?

We will make certain analysis and then take measures. One of the measures will be related to the work of the RS Inspectorate because the inspections are not performing well. We shall grant certain powers to inspectors which they did not have according to the previous law. Those powers will be granted to a small number of inspectors and many of their colleagues would not know about it. They will have the authority even to enter a private property without a court order. We will especially be interested in unreported workers. We have cases that some catering facilities work 24/7, are always full of guests but have one or two employees. We should not lie and say that this facility can work 24 hours a day, 365 days a year with only two workers. It is not possible. Especially if you see that those two workers are registered to a minimum salary. That is grey economy.

The RS Trade Unions Association stated that there are thousands of workers in that gray area?

If 50 percent of this were true, that is already too much. This the reason why we intend to introduce changes in the Inspectorate of the RS so that some inspectors could get special powers, which I mentioned, and will be able to control even their colleagues. It happens that an inspector performs an inspection of a company but since he has good relations with the owner, they sit down, drink coffee and the inspector writes a positive report. That will change. The controls will be targeted so that the inspector with special powers would be able to inspect the inspector who performed an inspection on the same day when his colleague returns after the inspection of the same company and checks the reports that his colleague wrote on the same day.

Have you identified other problems that you will address at the beginning of your mandate?

One of the first priorities is to assist the economy to become more competitive and more productive that would then lead to salary increase. It is automatically linked to the issue of people leaving the country. I am not sure that even if we double the salaries, that the issue would be solved. No matter how much we raise salaries, we cannot compete with one Germany, Austria or Slovenia ... Unfortunately, those migrations are not happening only in the RS, but also in other European countries. It is not, of course, an excuse not to take action. With the help of the real sector, I think we will be able to increase employment, salaries and pensions.

We shall prepare an action plan for 2019 and inform the public about what our first steps. We intend to tackle several things simultaneously. We also plan to get rid of parafiscal fees and after that we shall sit down with the business community and the trade unions and say which of those can be abolished and which decreased. I want everyone to read the Keynote Address and the Economic Reform Program of the Republic of Srpska for the period 2019-2021 because it states in detail what we are going to do and we will adhere to that. Whether it will go faster or slower depends on a variety of factors.

How will you help the economy?

If, for example, direct taxes grow for few percent, that much we would decrease the direct burden on the economy. We need a couple of years, if we decrease it by a few percent, to approach the 2008 level. We can raise the efficiency and competitiveness of the economy by targeting grey areas, unfair competition and a number of other measures. One of the measures to reduce the grey zone is modification of the legal solutions on the dividends which some employers use to pay the wages to unreported staff. It turned out to be the cheapest way to get cash, which they then use for something which is not good. We plan to change legal solutions and tax the dividend beyond 10 percent.

In your speech you mentioned the reform of the public sector. Does it mean firing of the surplus of workers?

No, we shall impose moratorium on further employment, especially of unproductive workforce, and prevent piling up of the administration. We shall not totally stop new employment, because we do not want to generate detrimental effects. When it comes to local administration, we intend to introduce more order, but shall not drive people to the street, if found to be a surplus. People who run local communities will have the opportunity to set up an enterprise that is essential for the work of this local community and to deploy redundant staff to that company. In addition, we shall offer the surplus of employees to the real sector. If a lawyer, economist or a person of the required profession is regarded a surplus in the local community or the RS Government, and some business association needs it, we will be ready to pay his salary from the budget for the first year after which the employer shall take over the obligation and be bound by a previous commitment to keep that employee.

What the RS Government can do to protect domestic production?

Considering that the protection of domestic production is not within the jurisdiction of the Government of the Republic of Srpska, but a matter under the BiH institutions level, we shall delegate the issue to the joint institutions and help solve this problem. However, there are certain issues that require a realistic approach. If the RS, for example, this year reached a record of the 70 percent of import rate covered by the exports, I think we should not be irresponsible and rush forward with some measure that might cause countermeasures. The question is what shall we do with our goods!? I understand those who manufacture only for the domestic market so they are in a disadvantage with importers and import lobbies. However, what about those who plan to export? If we resort to a certain measure of closing the boundaries or imposing "restrictions" in terms of import, will this cause the same countermeasure?! Domestic producers shall always have our support, but we need to be very careful and very smart.

How realistic is it to expect an average salary in Republic of Srpska to be BAM 1000?

Our goal is to reach that level of salaries, but I cannot give exact deadlines. Whether it would be in June, December or some other day, we shall see. However, it can be said with certainty that as of January 1, the average salary will increase several percent. With a few measures that the Government of the RS took so far and with the announced 8% increase of salaries in education, culture, this would be automatically reflected on the average salary. Here I have to refer briefly to the measure of the previous RS government when salaries were increased by BAM 30. Many then received this measure with a mockery. However, no one mentioned that this increase of 30 BAM cost the budget almost 70 million marks. What I am not satisfied with, as far as that measure is concerned, is the attitude of the business community. I expected that the business community will join this measure and give its contribution by giving it another BAM 20 and then that increase would be BAM 50. However, they did not do it. I am not supporting the idea that the state should give up its revenue so that some irresponsible businessman could buy another jeep or another apartment. We have a lot of ideas about how to do things and improve people's lives, but the biggest problem is the abuse of these measures. Here, even for this measure, which I mentioned, I got information that certain employers even asked their workers to return those 30 BAM. If that's true, then we are really morally very low. If I had found myself in a position that the employer tells me that from a salary which is impossible to live on anyway, I return those 30 BAM, I really think I would leave this country too. This is no longer just a migration, that is violation of dignity, honor and humanity. I do not want to excuse the RS Government from its share of responsibility but the burden of migrations cannot be only on us, but also on employers.

For years, there has been a debate about the need to pass a law that should make it possible to check the origin of one's property. When can this Law be expected?

This is under the jurisdiction of the RS Ministry of Justice. As the Prime Minister of the Republic of Srpska, I shall not be in the way of such a legal solution. I have always supported this idea not only formally or for the sake of politics, but for its real purpose and feasibility in reality. This Law must cover the period from the war to the present and not only to apply to modern times. As far as I am concerned, my property can be examined whenever, everything is transparent.

You mentioned in your Keynote Address that the health sector in the RS "is bleeding". What did you mean by that?

I was referring to accumulation of unpaid obligations. We have to stop this. For years there have been talks about the excise taxes on tobacco products and alcohol that could be used as an additional source of funding for the healthcare system. I think this issue should be addressed with the BiH institutions in the coming period.