The amendments to the Law on State Social Insurance, which provide for this, were presented to the Seimas this week. The amendments will be further discussed on June 16, when they will be considered by the Committee on Social Affairs and Labour.
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According to Deputy Minister Saulius Davainis, who submitted the amendments, the aim is to ensure minimal guarantees for employees, for example, a full month of “Sodra” (social insurance) seniority – such a procedure is currently applied when a person earning less than the MMA (Minimum Monthly Wage) works for one employer.
“Even if a person works for one employer with less than a full-time load and does not earn the MMA, the employer still has to pay taxes based on the MMA, but if they work for two or more employers, they did not have to do that,” the Deputy Minister explained.
According to him, the changes aim to correct a loophole regarding “Sodra” contributions when working for two or more employers.
“There are cases when a person works for several employers, but their total income still does not reach the MMA, so the employee does not acquire all social guarantees, because those several employers do not pay contributions based on the MMA, which later affects employees’ pension social insurance and other guarantees,” the Deputy Minister added.
According to S. Davainis, there are residents who work for as many as 12 employers but do not receive the MMA: “This means that social insurance contributions are not paid for them based on the MMA.”
According to him, last year there were about 8.14 thousand employees who worked for more than one employer, of whom about 62 percent worked for two employers and did not earn a salary exceeding the MMA: “The largest part of such employees consisted of cleaners, housekeepers, assistants in offices, hotels and other institutions, as well as managers of institutions and organizations and administrative managers in the business services sector.”
He emphasized that employers will not experience an additional burden due to the new procedure, and the “Sodra” budget will additionally receive about 7.2 million euros.
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Meanwhile, conservative Arvydas Anušauskas proposed calculating additional “Sodra” contributions for such residents based on hours worked. He believes that due to the new procedure, employers will incur additional costs and will therefore dismiss people.
“There will be additional costs for employees, (…) the opportunities for those people to get a job will decrease. They will simply be dismissed – no one will want to pay extra money for them,” the parliamentarian pondered.
“Peasant” Valius Ąžuolas also agreed with him: “Why pay the full amount of taxes if you work two hours? The employer does not pay taxes, remember one thing, the employee pays taxes, the employer states the agreed amount on paper.”
He also believes that the new procedure could encourage the growth of the “shadow economy”.
Meanwhile, democrat Linas Kukuraitis pointed out that those who can only work a couple of hours a day might lose their jobs.
Algirdas Sysas, Chairman of the Seimas Budget and Finance Committee, assured that the amendments are socially just, that each employer will pay taxes proportionally and prevent some employers from cheating: “There are cunning ones who take advantage of the fact that one pays a small amount, while others do not.”
A. Sysas reminded that the “Sodra” contribution floor was introduced a few years ago when it became clear that more than 10 thousand company managers received a salary lower than the MMA and did not pay social insurance contributions.
“If a person is paid half of the minimum wage, then they are credited not with a year of insurance seniority, but only half,” the politician said.
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