New Regulation Increases Worker Numbers by 18,700 Overnight   ({{commentsTotal}})

A new law requiring all businesses to register an employee before they begin work saw the registration of 18,729 new employees on July 1, when the law took effect.

The regulation is part of a wider state strategy to cut down on tax fraud, with many companies, especially in the construction business, paying salaries under the table. Many only register workers for tax and social benefits following a crackdown by tax authorities. Companies previously had a few weeks after beginning a work contract to register an employee.

Around 8,000 of the 18,700 were employees under contracts that did not previously need to be registered, Eesti Päevaleht reported on Wednesday.

The new regulation means employees will no longer have to register new employees at the Health Board and other state agencies, but only at one central Tax Board database.

Other initiatives include a crackdown on business-owned vehicles used for private purposes, which will no longer be subject to tax breaks from December 1 and a requirement that all business transactions over 1,000 will have to be registered from November 1.