A novelty in labor law: gray work or “under-declared work”

GEO 117/2021 introduces a legal institution of novelty in labor law: underreported work. This means granting a higher net salary than the one established and highlighted in the payrolls sent to the tax authorities.

Under-declared work is sanctioned with a fine of up to 20,000 Euros. At the same time, the employer risks criminal sanctions for such conduct.

Motivating the urgency of adopting this ordinance, the Government states that it wants to discourage practices that generate tax evasion and non-compliance with the rights of employees who are deprived of establishing and transferring to the state budget and the social security budget the amounts due.