Most frequently these are employees in the hospitality, retail and construction sectors, but also in the IT industry. This is what a new study of the project “Neviditelní” (The Invisible) says. Those concerned either do not report their income to the state at all or only at the level of the minimum wage. They do not pay tax on the rest of their income that they get “on hand”. “These people are not aware of the consequences of their behavior”, explains Aleš Rod from the Center for Economic and Market Analysis CETA, which is involved in the project. “Even short-term employment in the shadow economy can have lifelong effects, for example through poor access to health care or social security. These ‘invisible people’ also have little chance of getting a loan and they have to be content with a minimal old-age pension. “
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According to the study, people who are aware of the risks of being hired in the black only decide to do so in difficult life situations, such as after a notice of termination or divorce or when they are in debt. On the other hand, some people consciously exploit the shadow economy, for example to have a higher income in the short term. The long-term effects can then occur suddenly and unexpectedly, for example due to illness or loss of a job. “This has been shown to its full extent during the corona pandemic. Unemployment rose rapidly in some industries. Employees who previously did not declare all of their income suddenly did not have the same rights and entitlement to financial support as those with correct tax returns “, so Kryštof Kruliš vom Verbraucherforum.
Sometimes employees are also forced into the shadow economy by the employer. Appropriate methods include wages “on hand” at shorter intervals, irregular working hours, non-issuance of contracts and circumvention of third parties.
The consumer forum, the CETA institute and the provider of non-bank loans Provident Financial are involved in the “Neviditelní” project. According to the authors of the study, the “invisible” are mainly students from socially disadvantaged families, single parents, young families with children, black employees, involuntary employees over 50 years of age, people with disabilities, poor households, former soldiers, farmers, employees in NGOs, senior citizens, Members of minorities as well as small business owners.
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