Estonia's Minister of Finance Martin Helme wants the Tax and Customs Board to subject all agency workers of Ukrainian origin working in Estonia, their employers, and the companies using their labor to submit to a systemic check.
"As we know, very big numbers of Ukrainian citizens are working in Estonia who have concluded an employment contract with a company based in Poland, which posts the worker to Estonia as agency workforce. In this way the restrictions and prohibitions contained in the Aliens Act related to third-country citizens taking up residence and employment in Estonia are being bypassed. Nor are labor taxes paid on agency workforce in Estonia," Helme said in a letter to the director general of the Tax and Customs Board, Valdur Laid.
The minister said he has serious doubts that in many cases the posting of Ukrainian citizens to Estonia for work does not meet the characteristics of agency labor in that it does not constitute the temporary posting of a worker working abroad to Estonia.
Due to this, the minister is asking the Tax and Customs Board to embark on a systemic check of all agency workers of Ukrainian origin active in Estonia, their employers and the companies using their labor to establish potential concealed employment relationships.
"For this the experience that the Board has from earlier times with checking of persons working for Estonian employers in Finland, in relation to whom Estonia was shown as the place of work only in order to be able to pay a tax-free daily allowance, can be excellently tapped into. In the present case we are seeing a rather similar situation and it is possible to use similar evidence," the minister said.
According to Helme, it is also possible that the intermediator of agency work registered in Poland is actually operating in Estonia and has set up a permanent establishment here. If this were the case they would have to pay labor taxes in Estonia and abide by the requirements when hiring employees. The minister is also asking that this area be treated to an in-depth check.
Helme wishes for the Tax and Customs Board to direct a substantial portion of its oversight resource to checking agency workforce and to submit to the ministry a relevant action plan and monthly reports about its fulfilment, showing the scope of the checks and their outcomes, among other things.
The minister recommends the Tax and Customs Board to engage in intensive cooperation in this with other supervisory agencies, primarily the Labor Inspectorate and the Police and Border Guard Board. If legislative amendments are necessary for more effective solving of the problem, the Tax and Customs Board should submit relevant proposals to the ministry as soon as possible.
Prior to the Employment Contracts Act, agency work is defined as a situation where an employer and employee agree that the employee does work, on a temporary basis, in compliance with a third party's instructions and supervision.
The Working Conditions of Employees Posted to Estonia Act meanwhile says that a posted employee is a natural person who usually works in a foreign state on the basis of an employment contract, and whom the employer posts to work in Estonia for a specified period of time for the provision of a service.
Editor: Helen Wright