Work on a trade license in construction may backfire in retirement

Prague - Workers employed on construction sites based on trade licenses may receive only a very minimal income upon retirement. In the future, this could mean increased costs for the economy and the state. This was agreed upon at today's meeting organized by the Chamber of Commerce (HK) between Minister of Labor and Social Affairs Petr Nečas and Vice President of the Business Association František Holec.
   "A new social bomb is emerging here, which could cost us a lot of money," Holec said. According to entrepreneurs, the income of such employed people may not even be enough to cover basic living needs.
    "In retirement, self-employed individuals are actually at greater risk than employees," agreed Minister of Labor and Social Affairs Petr Nečas. The same opinion was expressed by Deputy Chairman of the ČSSD Zdeněk Škromach. Nečas believes that reducing labor costs or greater flexibility in the labor market could be tools for limiting illegal employment.
    Entrepreneurs refer to any employment that is not in accordance with legal regulations as so-called undeclared work. Illegal work in construction accounts for about 10 to 15 percent of GDP in the entire sector, claims the chamber, referring to a survey conducted two years ago in ten EU member states, including the Czech Republic. Construction leads in these forms of work ahead of all other parts of the economy.
    According to entrepreneurs, this situation disrupts competition, leads to violations of safety regulations, tax evasion, and may become a source of social instability in the future. However, another problem is the neglect of workplace safety or lack of interest in apprentice preparation and worker education.
    The European Builders' Confederation identifies a shortage of workers as one of the main causes of illegal employment. Domestic builders consider this problem to be the most serious brake on the further growth of the industry. According to a previous statement by the President of the Union of Entrepreneurs in Construction Václav Matyáš, construction companies currently lack at least 5,000 employees, but the need is much greater. Builders want to recruit new workers, for example, even in Vietnam.
    Last year, according to data from the Ministry of Labor, a record number of foreigners came to the Czech Republic for work. By the end of December 2007, there were nearly 55,200 more people working legally in the country than a year earlier. Thus, approximately 240,200 foreign workers were employed in the Czech Republic. In 2006, the Czech labor market attracted over 33,300 foreigners.
    In construction, foreigners accounted for about 12 percent of total employment, according to data from the Research Institute for Labor and Social Affairs from two years ago.
    Three-quarters of construction companies operating in the Czech market agree that companies in construction employ foreigners without the necessary permits. This is according to a survey conducted by KPMG last September. According to the Ministry of Labor and Social Affairs, 37 percent of foreign employees in the Czech Republic are working illegally.