Region tackles late wages problem

31/01/2013

Unpaid or delayed wages have been an issue for the last 20 years in the region, but have gotten worse in the economic crisis.

By Katica Djurovic for Southeast European Times in Belgrade -- 31/01/13

It is estimated that about 1 million workers in the region are paid late, or not at all. [AFP]

As late payment or non-payment of wages becomes widespread, more countries in the region have adopted laws sanctioning employers. It is estimated that about 1 million workers across the region are paid late, or not at all.

Existing penalties, such as fines, have proven to be ineffective in most states.

According to the Serbian Federation of Independent Trade Unions, employers in the country pay about 31 million euros per month to employees, or 375 million euros annually. Around 45,000 employees don't get their wages at all, while 100,000 are paid after several months delay.

The federation proposed a prison sentence for employers who do not pay wages for more than three months.

"The state has to bring the stricter law that will make employers pay wages. Otherwise, this bad trend will continue," Zoran Mihajlovic, secretary of the federation, told SETimes.

Radmila Katic Bukumiric, deputy labour minister, said the new law clearly defines the penalty from those employers that do not pay. The fines are from 7,000 to 9,000 euros, and a prison sentence will follow if the employer refuses to pay the wages.

"In general, we support all measures that provide realisation of workers' rights. In the meantime, our inspectorate controls and files many misdemeanor charges for late wages," Bukumiric told SETimes.

According to the trade unions, there is no case in Serbia of employers being fined for unpaid or delayed wages.

Admir Djulovic from Serbian city of Novi Pazar, who runs a grocery shop employing eight workers, supports the federation proposal.

"Why run a business if you cannot provide employees with their basic right -- wages? Having delays in payments for more than one month, for me as an entrepreneur, would be devastating and embarrassing," Djulovic said.

In Republika Srpska (RS), a recent study conducted by the labour unions showed that about 30 percent of employees do not receive their wages on time.

Earlier this month, the BiH entity adopted a new labour law that will provide prison penalties from six months to five years for employers who do not pay wages.

In Croatia, between 80,000 and 100,000 workers are not paid on time, if ever. Croatia will apply the same legislation as RS, beginning in July.

In Bulgaria, strict laws on late wages have proven successful. Companies have begun paying their workers' overdue wages, after Bulgarian labour inspectors found that 72 employers owed workers close to 9 million euros. The inspectors, who began a cross-sector campaign in June 2010 to monitor companies' compliance with labour law, found 15,000 violations.

As a result, nearly 4.4 million euros, about half of the outstanding amount, has been paid. Any employer failing to comply with the inspectorate on non-payment of wages has to take full administrative and criminal responsibility.

This content was commissioned for SETimes.com.