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Number of people paid envelope wages reduces in Latvia

1% of employed people in Latvia are paid envelope wages. 86% admit being paid official wages, according to results of a survey by CV Market.

In the survey «Are you paid your wage officially?», 7% of respondents revealed that the largest portion of their wage is paid officially, whereas 6% of respondents said that the largest portion of their wage is paid in an envelope.

Compared with the situation that was present last year, the number of people who are paid envelope wages has reduced. Last year, 4% of people employed in Latvia were paid envelope wages. The number of people who said that part of their wage is paid in an envelope has increased this year (4% last year). The number of employed people whose wage or the largest portion of it is official has not changed much. A year ago, 85% of respondents were paid wages officially, whereas 6% were paid the largest portion of their wage officially.

«The positive tendency is that the number of employers who pay envelope wages keeps declining. It can be concluded from the survey that the majority of them have transitioned to paying a small portion of the wage officially,» CV Market personnel selection manager Kristaps Kolosovs comments data of the survey.

He says that it is important to understand that both sides lose from envelope wages. «For employees this means no social benefits, whereas employers risk being punished for violating the law and losing the ability to find highly-qualified and loyal workers.»

Kolosovs also emphasizes that the size of official wages also plays an important role. More and more employed people start to understand that legalization of a symbolic portion of their wage is not enough any more. To receive appropriate benefits, it is necessary to pay taxes from the full amount. «If the employer does not want to do that, the employee has to take matters in their own hands and request wages to be paid in an official manner.»

Survey data also shows that men are paid wages partially or fully in an envelope more often than women. Partial official wages and envelope wages are paid the most often in the finance sector, assistance and administration, as well as customer service and sales industry. Respondents who said that their entire wage is paid in an envelope most often represent production, transport and logistics sectors.

Envelope wage trends are also similar around the world. Bizfluent.com reports that the most common fields in which wages are not paid officially include car trade, child care, cleaning services, animal care, gardening and construction. This is why before a person starts working, it is necessary to analyse a company’s wage system in the chosen company.


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