Envelope wages are wages on which some or all the labour taxes are not paid. Receiving such wages reduces an employee’s rights, benefits, and sense of security about the future. The ETCB also draws special attention to the problems caused by envelope wages and undeclared work among young people, who have less experience with employment and taxes than others.
Employers have significant power over employees who work without a contract and accept envelope wages. They may lose their holidays, holiday pay, and sickness benefit. “These are real people’s real experiences from which others can learn. If you work without a contract, you might not even receive your envelope wages in the end. Therefore, do not accept work without a contract; be sure to sign a contract with your employer before starting work,” said Aune Maria Marjapuu, Head of the ETCB’s Tax Audit Unit.
The ETCB has received many reports of young people being deceived during their first work experiences. In addition to working without a contract, young people have been offered, for instance, several unpaid trial days, after which they were neither hired nor paid. Such an offer is neither acceptable from the employer nor beneficial to the employee.
“As soon as you start working for someone – for example, serving customers or stocking shelves – that is the work you need to get paid for,” emphasised Aune Maria Marjapuu, head of a unit at the ETCB.
Accepting envelope wages limits a person’s ability to buy a home or a car, among other things. When applying for a home loan or lease, lenders and lessors only consider official income. Furthermore, receiving envelope wages in full or in part reduces a young person’s access to health insurance. Without health insurance, when visiting a doctor, a person must cover all their medical expenses out of pocket, in addition to the visit fee.
In June, a digital campaign titled “The Truth About Envelope Wages” will launch, targeting young people aged 15–26. Musicians Clicherik and Mäx are participating in the campaign aimed at the youth. The campaign will be featured on TikTok, Instagram, Facebook, Spotify and in Apollo cinemas.
Read more about the reasons to refuse envelope wages on the website of the ETCB (in Estonian). Watch the campaign video in Estonian on YouTube.
