Construction companies support worker register plan but disagree over cost

Construction site.
Construction site. Source: Siim Lõvi/ERR

Construction companies support the state's plan of requiring contractors to electronically register workers on construction sites to fight tax evasion and illegal labor but want the state to pay for the system.

"It has been our position for years and one we've introduced to the tax board to have a worker's card tied to the employment register that could be used to identify the person – whether they are Estonian or a foreign worker," Raivo Rand, member of the board of Rand & Tuulberg and the Estonian Association of Construction Entrepreneurs said on Vikerraadio's Uudis+ program.

"All main contractors are interested in who their subcontractors work with and for it to be easy to walk up to a worker and determine who they are and where they work using a simple application," Rand said.

Asked by host Arp Müller who should pay for the system that is estimated to cost around €1 million to develop and run, Rand said it could be the state.

"The system could be developed by the state, with workers charged for the card as they would get to keep them when going to work for another employer. The only thing that would change would be the name of the employer on the card. It would function like the ID-card, just with different data," the businessman added.

If the state estimates the system would yield some €5.7 million in taxes, why shouldn't it pay for development, Rand added.

Rand said that contractors agree with the Ministry of Finance's proposal that electronic registration of workers would be required on sites maintained for at least 30 days, that have at least 20 workers or require over 500 working days to finish, even though the obligation is tied to the construction contract in neighboring countries.

"We have discussed it and don't mind the rate. But allow me to emphasize once again that first we need a system for identifying workers and only then can we begin to register them. It will not be possible before that," the association's board member said.

"The law needs to be universal, work on all sites, both state and private objects. People working very small sites should still have that card with them to make it possible to determine whether they have been entered into the employment register and pay their taxes here," Rand found.

The Ministry of Finance sent out for coordination intent to elaborate an amendment last week that would obligate main contractors to adopt electronic worker registration devices on construction sites to monitor the movement of workers and share the data with the tax board, police and labor inspectorate starting in 2021. The amendment is aimed against envelope wages and illegal use of foreign labor and yield tax revenue of €5.7 million.


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Editor: Marcus Turovski

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