Software glitch causes thousands of Macedonians to go unpaid

24/02/2009

Macedonian workers and employers raised an uproar after a clumsily introduced software system caused many workers to go unpaid in January.

By Marina Stojanovska for Southeast European Times in Skopje -- 24/02/09

Many Macedonians went without pay because of the glitch. [Getty Images]

Anger and confusion surged in Macedonia this month as the botched introduction of Public Revenue Office (PRO) software for the "gross salary" system left thousands without pay for all of January. Among them were the two leading presidential candidates.

According to the daily , Georgi Ivanov and Ljubomir Frckoski, the candidates of the ruling VMRO-DPMNE and the opposition Social Democrats, respectively, had not received their December and January salaries as of early February. Both teach law at the University of Skopje.

Besides day-to-day expenses, Macedonians had debts to pay and interest payments to fear, while having no money in their pockets. Local media estimated about 600,000 residents owed an average of 1,800 euros to banks in November 2008, leaving them vulnerable to penalties for overdue payments.

The situation cleared up somewhat by mid-February, although it was still far from ideal. As of February 15th, the PRO reported that of the approximately 60,000 registered employers in the country, 42,060 had paid their workers' insurance premiums and salaries.

The government introduced the new system in an effort to improve transparency, believing it would force employers to pay their mandatory contributions to their workers' pensions and health insurance, since those who failed to make those contributions and pay salaries by the 15th of the month would face fines as high as 2,000 euros and even the seizure of their businesses by the PRO.

Given the system's chaotic roll-out, the government did not enforce such threats and imposed relatively low penalties on the approximately 5,000 businesses that failed to submit even estimates of their obligations by February 15th.

Finger-pointing was widespread. The finance ministry blamed employers for submitting their January payroll estimates late. Numerous companies also failed to verify the compatibility of their accounting software with that of the PRO in time.

On the other hand, angry executives contended that the inflexible PRO software blocked entire companies' payrolls if even one employee's salary information was remiss.

A failed February 11th no-confidence vote in parliament cited the salary fiasco as one of its justifications, and the nation's largest labour union demanded Finance Minister Trajko Slaveski's resignation.

The government, though, defends the introduction of the technology. Deputy Prime Minister Zoran Stavreski described the system as "worthwhile, sustainable and transparent", while contending "almost all European countries" already have it. Stavreski said the government would iron out the glitches as they occurred.