Wages can only quickly become a reality by transfer – everyone will feel the consequences

A stricter proposal gains ground in the Seimas

At the end of April, after the presentation, the Seimas approved the proposal of the members of the Seimas to modify certain provisions of the Labor Code related to the remuneration model.

The proposal stated that salaries and other employment-related benefits must, without exception, be paid by transfer to the pay account specified by the employee, which means that cash settlement would be prohibited.

Deputy Minister of Social Security and Labor Vytautas Šilinskas said that this issue is certainly not new and that discussions in the Tripartite Council have been going on for several years.

“The problem with paying in cash is often that the documents are falsified, it is shown that the employees have been paid, but without them there is no other evidence of whether or not money has been paid. We get a lot of complaints about this in the Labor Disputes Commission, people say that there, not their signatures, that they may not have understood, but they didn’t actually get the money, ”he argued why Lithuania needed to change the payment procedure. wages.

The Ministry of Social Security and Labor itself has also prepared amendments to the Labor Code, but its proposal differs from the one proposed by the members of the Seimas and is more compromising.

“We suggest that, as a general rule, the salary is paid by bank transfer, but there could be exceptions when the parties agree and in that case it is paid in cash,” explained the deputy minister. However, according to him, the ministry does not see any serious argument why it could not support the stricter salary payment procedure now proposed by members of the Seimas, which no longer provides for any exceptions.

“These are elected representatives of Lithuania, and if there is a proposal in the Seimas and it is supported not only by the ruling, but also by the opposition, then we believe that this proposal should be supported,” the deputy minister said on the show.

When asked if there are examples of countries that also have similar or similar payment arrangements, he said that we could take the Scandinavian countries as an example.

“They are practically ditching cash altogether and aiming to stay out of the economy. We believe that this is a good path, “said V. Šilinskas.

The deputy minister assured that the shadow reduction chain would work in such a way that an employee who received a commission on request would try to spend money also on request, because it is not attractive for such a person to pay in cash. Then, as you said, you would buy services from those who accepted card or bank transfer payments, and then those companies would be forced to operate transparently.

In general, V. Šilinskas agreed that doubts could arise about withdrawing money in rural areas due to the lack of ATMs, but assured that there are more ways to withdraw them.

The deputy minister also referred to some problems regarding people indebted to one or another institution, such as if the profits were transferred to the account, the money could be discounted.

“It just came to our knowledge then.

For example, a person is divorced and does not support his children, does not pay alimony, then he has debts with his family, children and to this day it is easier to hide that income when a person receives it in cash than by order , “he said.

It does not link the change to shadow reduction.

Danas Arlauskas, president of the Lithuanian Employers’ Confederation, explained that he did not understand the main purpose of such an amendment to the Labor Code.

“Is the goal to reduce the black economy or to check equity?

It is as if we started with a reduction of the black economy, and now we move forward and we need to rescue the disadvantaged. Of course, there are also dishonest businessmen ”, he agreed.

D. Arlauskas said that both depositing and withdrawing money are very popular operations today and many people use it.

“If politicians think that they can make decisions on behalf of the Lithuanian people to ban cash, it does not fully satisfy the interests of the people. People want cash and operate it.

If we had an ATM in every town and everyone used cards, then I understand, ”he thought.

Speaking of the compromise option proposed by the Ministry, Mr. Arlauskas stated that it seemed like a good proposal, but he also mentioned the important role of banks in this place.

“The Bank of Lithuania has done a good job and has set quotas on how much money a person can earn for free, but I would say that banks do not have a lot of money in this place.

Still, they play with money that is in the accounts. We see that the loans in Lithuania are 1.5 to 2 percent. they are bigger than in other parts of Europe, ”he said, and banks generally described this as a desire to keep and have as much money as possible.

“It just came to our notice then. Of course, it’s good for the banks,” he added.

Asked about the challenges that employers would face if the salary payment procedure is approved, D. Arlauskas summarized that the world would not change.

“I associate the inconvenience more with people who work with business licenses who do business in the market. I think it will affect people and consumers the most, and the biggest inconvenience and damage will affect the voters themselves.

Here we are talking about how to reduce the shadow economy in companies, but it is not about that. They are both money, they just have their own shape. Nobody has investigated that if companies pay in cash, the shadow will increase in some way, ”said D. Arlauskas.

He said he agreed that the shadow should be reduced, but added that it should be done in different ways.

You can respond to the company itself

Daiva Čibirienė, director of the Lithuanian Association of Accountants and Auditors, also stated that she did not support the idea of ​​the transfer of wages.

“We do not support or understand this idea. It has nothing to do with the shadow. Here’s another flag on how to ban cash. There is not much cash and stuff.

If someone pays salaries in the shadows, the companies continue to pay the official part through the bank, nobody interferes with the documents, so that unofficial part of the shadows would still remain, it would not disappear anywhere, “he said.

As said, such changes would also bring inconvenience to the population.

“After all, the banks simply block the accounts of the population, because the person did not fill out any questionnaire, did not take actions related to the prevention of money laundering and the fight against terrorism.

It is possible that the person did not pay the taxes on time and their bank accounts are blocked, ”he said.

According to D. Čibirienė, certain sectors are settled mainly in cash, where there would be more difficulties if wages were paid by transfer.

“Imagine an entrepreneur who has 20 rural stores and employs 20 different vendors who get a lot of cash at the register. It has been agreed with the vendors that the manager periodically comes to the store and collects cash.

Sometimes when bringing the merchandise to the store, the seller can pay everything in cash, as well as withdraw his salary in cash from the register at any time.

Suppose she pays the salary in the middle of the month when she needs the money, and at the end of the month the salary is considered paid, and if the adjustments are accepted and she collects the money during the month, they will not be considered as payroll. The employer must pay through the bank. Any cash payment will not be considered a salary payment, ”he explained.

According to the spokesperson, there are entrepreneurs for whom having card readers will simply be too expensive.

“Their margin is small, so it won’t even be worth doing activities for them.

If a small margin is applied and the business does not have the exceptional conditions that large supermarkets have, it will be bad, “he said, adding that there are still many organizational issues that raise questions, such as the ATM network.

He stressed that there are not many and in many places it is only allowed to withdraw the money and not accept it.

Delfi recalls that for the new amendments to the Labor Code to come into force, the Seimas will have to vote again, and with the consent of the Seimas, they would come into effect from 2022. January 1