What exactly is undeclared work? It is any paid work for which no employment contract, agreement or invoice has been issued (if you have a trade license). The worker is often tempted to start immediately, have money on hand and earn more for the same work than if an employment contract had been concluded.
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Undeclared work belongs to the so-called gray economy and is basically a crime
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“The amount of mandatory contributions is high in the Czech Republic. If an employee has a salary of 20 thousand crowns net, the employer’s costs are almost 35 thousand crowns. It is seemingly tempting for entrepreneurs and employees to avoid paying levies and taxes and to divide the money saved in this way, “said Jaroslava Rezlerová from ManpowerGroup, adding that this procedure can be reversed for both parties.
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You will not withdraw the payment, you will not receive support
If there is no contract or agreement, you can never be sure that the money promised will be paid to you.
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“If your employer refuses to give you money, you have no leverage to get paid. Usually it starts with extending the payout period and promising to get paid in a few days. After a while, however, it is clear that you will not see the money again. So you worked for free for several weeks, “Rezlerová pointed out.
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The second risk is that you may lose your job from day to day, without any compensation (you are not entitled to a two-month notice period during which you could find another job, nor to severance pay). You don’t even get unemployment benefits (you have to be employed and have social security for at least 12 months in the last two years).
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The employer does not pay health or social insurance for you. So if you don’t pay for it yourself, you will grow debts with insurance companies, which will surely catch up with you one day.
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Another risk is that the time you work illegally does not count towards your retirement, so you will have it lower than if you worked officially all the time.
Of course, when working illegally, you also give up paid leave and various benefits that you, as a legal employee, would have.
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High fines for undeclared work
Undeclared work belongs to the so-called gray economy and is basically a criminal offense, for which there is a risk of heavy fines not only for the employer (up to 10 million crowns), but also for the worker (up to 100 thousand crowns). If you want to avoid a fine, for example by concealing your identity, you risk a penalty of up to 200,000 crowns.
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“Such a risk is definitely not worth it and it is good to think about all aspects of working illegally before you decide on this path,” warns Jaroslava Rezlerová.
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