Survey suggests foreign employees often earn above national average

The construction field in Estonia is a particular magnet for short-term employment.
The construction field in Estonia is a particular magnet for short-term employment. Source: Rene Suurkaev/ERR

The average monthly wage for foreign employees in Estonia was around a third higher than the national average in 2018, according to one survey, BNS reports.

According to the survey, compiled by Statistics Estonia for the Chamber of Commerce and Industry, among 5,700 foreign employees working in Estonia on the basis of a residence permit, average monthly wage was €1,654 in 2018, compared with the national average of €1,218 per month, a pattern repeated across most sectors of employment when broken down.

In IT and communications, the gap in average monthly pay was highest, at €1,300 per month (ie. €1,300 more than the Estonian average in the same sector). In the healthcare sector, this gap stood at €1,000, and the gaps in the education, and retail and wholsale sectors, stood at a reported €900 and €600, respectively.

Foreign employees also earned more in the manufacturing and construction sectors, according to the statistics.

Residence permits can be both temporary and permanent, depending on the employee's country of origin, the length of time they have resided in Estonia, and other factors, including requirements of basic salary minimums in being issued a permit in the first place, which possibly exerts an upward pressure on the average.

Additionally, many foreign employees work (indeed, are enticed to work) in IT jobs based in the capital, which again will bring up the average.

Short-term employees also paid above national average, though taxes tend to Haemorrhage

The pattern is repeated in the case of short-term employment, according to the survey.

Among those working in construction, a sector which employs a significant number of short-term or seasonal employees, earnings were about 20 percent higher than the overall sector average, at €1,500 per month, the survey noted.

Around 20,000 individuals are registered as short-term employees, according to the Police and Border Guard Board (PPA). Of these, about 13,000 have a record of paying labor taxes in Estonia, Statistics Estonia found, with the remainder predominantly paying taxes in another EU member state, usually their country of origin.

The chamber did, however, issue a caveat about the above statistics.

"The Chamber of Commerce and Industry sent an inquiry ... to both the Interior Ministry and the PPA, yet has failed to get a response after several months of waiting. Nor has there been any noticeable sharing of such information with the public, or use of it in shaping policies related to foreign labor," the chamber said.

Purely in terms of the state coffers, the chamber suggests the state pay greater attention to seeking employees on the basis of a residence permit, thus making permits more readily available, to avoid taxes disappearing elsewhere, as they can do with short-term employees.

"Today ... we have reached a situation where immigration quotas become full before the year has started, making it very difficult for employers to hire a foreign employee on the basis of a residence permit; thus preference is given to short-time employment instead, which can lead to the state failing to receive labor taxes," the chamber said, according to BNS.

Editor: Andrew Whyte

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