Work informality is increasing in Albania, the highest concealment of real wages in the region

Unofficial work (unpaid work, or higher wages than declared) has increased in five of the six Western Balkan countries in the period 2016-2019, with the exception of Serbia, according to a recent report by the SELDI-Europe network Southeast for Leadership, Development and Integrity.

The highest level of work informality is in Kosovo, with 83% in 2019 (from 81% in 2016), followed by Bosnia and Herzegovina, with 48% (from 37% in 2016). Third is Albania, with an indicator of job informality of 47%, from 39% in 2016. Serbia is the only country that has recorded a decline in hidden employment levels since 2016 (by 5.7 points percentage to 46%).

The highest increase in work informality during this period was recorded in Northern Macedonia, from 30 to 42%, while in Montenegro it went to 41%, from 39% in 2016.

According to the report, working without an employment contract or receiving a higher reward than claimed in the employment contract both reflect the presence of hidden employment.

The percentage of those who work without a contract is the highest in Kosovo (25%). For the practice of concealing the current salary, Albania ranks first with almost half (46%) of all respondents engaged in a main job reporting that they work without having a contract at all or receiving a part of the salary informally.

This shows that while the nature of the contractual agreement (or lack thereof) varies between countries, they all have a high percentage of undeclared work, and even the lowest percentage in Northern Macedonia (27%) exceeds a quarter of that. all employees in one job, the report said.

Due to the high level of concealment of real wages, Albania also has the highest ratio of hidden practices in social insurance coverage for 2019. 34% of respondents reported that insurance is paid for lower wages than not that actually take. After Albania, this indicator is higher by Serbia and Northern Macedonia with 27%.

According to the report, covert practices related to social security include employees, who either do not pay any contribution, or are paid only on the basis of a "formal" salary lower than the real one. The results of the survey on these practices naturally reflect the indicators of undeclared work, as social security coverage is closely linked to the employment contract.

Sektori më i prekur nga ekonomia e fshehur në rajon është bujqësia. Kjo është veçanërisht e vërtetë për Shqipërinë, Serbinë dhe Bosnje-Hercegovinën. Më pas renditen pasuritë e paluajtshme, tregtia me shumicë dhe ndërtim.

Sektori i shërbimeve (kryesisht restorantet, hotelet, transporti dhe tregtia) është gjithashtu i prekur nga informaliteti. Në Shqipëri, sektorë të tjerë të prekur janë industria e këpucëve dhe veshjeve, minierat dhe prodhimi.

Sektori i modës, i cili ka ndikim të rëndësishëm në punësim dhe ekonomi, ka gjithashtu nivele të konsiderueshme informaliteti.

Në Maqedoninë e Veriut, pagat në zarf gjenden kryesisht në industrinë e ndërtimit. Megjithatë, rastet e shpeshta mund të gjurmohen edhe në bujqësi, hotele, kafene dhe restorante.

According to 45.7% of businesses in Northern Macedonia and 72.9% in Albania, corruption is the most important factor for the existence of a hidden economy.

This leads the public to believe that taxes are not used properly for high quality public services.

The 2019 Open Budget Survey confirms that the general public in the region lacks accessible information on the ways in which their governments collect and spend national budgets.

High tolerance for tax evasion and social security contributions has been cultivated in the Western Balkans due to the perception that tax authorities and the public system in general are corrupt, the report said. / Monitor