Greek Law 4554/2018, published in the Government Gazette on 18 July 2018, introduces measures aiming at enhancing the protection of outsourced employees and tackling undeclared work.

The key changes introduced by the new law:

• Measures enhancing the protection of outsourced employees
• Updated sanction system for undeclared work
• Notification requirements for internships
• Communication of administrative acts of the Labour Inspectorate (SEPE) by electronic means
• The 26^th of December established as a mandatory public holiday

Measures enhancing the protection of outsourced employees

In order to enhance the protection of employees of contractors and subcontractors, Law 4554/2018 establishes joint and severable liability of the principal with its contractors and subcontractors for the payment of wages, social security contributions and severance indemnity to their employees. Joint and several liability survives for 3 years after the termination or expiry of the contract.

The contract with the contractor and subcontractor must make specific reference to the (sub)contractor’s obligation to comply with the labour, social security and health and safety provisions.

The principal retains the right of recourse against the (sub)contractor, if it has demonstrated due diligence with respect to the (sub)contractor’s compliance with its obligations towards employees. Due diligence is presumed especially if the principal meets the following criteria;

1. obtains copies of monthly pay slips and payment receipts for social security contributions paid by the (sub)contractor,
2. in case of non-compliance, invites the (sub)contractor in writing to comply with its obligations within 15 days,
3. terminates the contract in case the (sub)contractor fails to comply with its obligations within the above deadline.

(Sub)contractors are obliged to indicate in the personnel list the principal to which their employees are assigned and provide the employees with an extract of such list. Principal is also obliged to display at its premises the above personnel list including the (sub)contractor’s employees working on site.

The principal and the (sub)contractor are jointly obliged to comply with the health and safety provisions and are jointly and severally liable for any claims related to health and safety or work accidents.

Any agreement excluding or restricting the above employees’ rights is null and void.

Updated sanction system for undeclared work

Law 4554/2018 imposes a fine of Euro 10,500 for every employee found to be undeclared in the personnel list during an inspection by the Labour Inspection Authorities. For repeat offenders employing undeclared employees within 3 years from the initial inspection, the fine is increased by 100% for the first repeated violation and by 200% for every subsequent repeated violation.

For every violation, the law establishes a presumed duration of 3 months for the employment of undeclared employees, unless the employer or the employee proves otherwise.

On top of the administrative fine, the employer is also obliged to pay the social security contributions corresponding to the above presumed period calculated on the basis of the statutory minimum wage.

In an effort to encourage employers to hire undeclared employees, Law 4554/2018 offers a discount on the imposed fine if within 10 working days the employer hires the undeclared employee(s) under a full-time employment contract with a minimum duration of 3 months.

In order to retain the discount, the employer must maintain the number of employees throughout the term of the employment contract. If the number of employees is reduced, the employer is in principle obliged to make new hires within 15 working days in order to maintain the same number of employees. The discount is not available to repeat offenders.

The above provisions will enter into force upon issuance of a Ministerial Decision setting out the details of the new system.

Notification requirements for internships

Law 4554/2018 provides that employers are obliged to notify via ERGANI all internships, and any modification thereof, before they commence. In the tourism sector, the total number of interns may not exceed 17% of the total personnel and, in any case, may not be more than 40.

Fines for undeclared work may be imposed by the Labour Inspection Authorities in case of non-compliance with the above.

The relevant provisions will enter into force upon issuance of a Ministerial Decision setting out the details of the notification process.

Communication of administrative acts of the Labour Inspectorate (SEPE) by electronic means

In an effort to simplify and facilitate the interaction between the Labour Inspectorate (SEPE) and employers, Law 4554/2018 establishes the communication of SEPE acts and fines via www.sepenet.gr as the norm. All SEPE acts shall be deemed lawfully notified to employers 5 days after they are posted on their account on the platform and notified accordingly via email.

In case of unavailability of the online system or in exceptional circumstances, SEPE may notify its acts by any available and appropriate means (e.g. by registered mail or by court bailiff).

The 26^th of December established as a mandatory public holiday

Law 4554/2018 adds the 26^th of December to the list of mandatory public holidays in Greece.