Proper voucher use will move people into labour market, EU official says

EFSI: "Social vouchers, including PHS vouchers, are based on key characteristics and should not be mixed up with other systems." [Ed Dunens/Flickr]

In light of recent misuse cases reported in Italy, an EU official told euractiv.com that vouchers, if properly used, could result in moving more people into the labour market and tackle undeclared work.

In an effort to tackle rising undeclared work and the shadow economy, the Italian government introduced in 2008 the Buoni Lavoro, a system of “job voucher” payment.

Its initial objective was to provide a form of regulation of wage payments to seasonal agricultural workers and occasional work in family businesses.

For example, employers could buy vouchers, via the post, and provide them to workers as payment. Workers could get 75% in cash while the rest was for social security.

But things changed when successive government reforms of the scheme gradually helped it expand to other sectors as well, and missed its initial goal. Instead of using it on an occasional basis, Italian employers made a regular use of it and in some cases, it led to a replacement of work contracts.

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According to the Fair Labor Association, more and more Italian garment and footwear manufacturers started taking advantage of the job voucher system instead of providing their short-term workers with legal employment contracts.

“Their use has recently skyrocketed, from around a half million vouchers used in 2008 to 115 million in 2015,” the FLA noted.

The Italian Confederation of Labor (CGIL), which is the largest union in the country, gathered three million signatures and asked for a referendum to abolish voucher payment. The vote was due on 28 May, but bowing to the pressure, the government issued a decree last week (17 March) and imposed a total ban on the scheme with a transitional period until the end of the year.

Contacted by euractiv.com, a European Commission official stressed that the executive was aware of the situation and focused on the advantages of positive voucher use.

“The Commission considers that vouchers if properly used, can bring more people into the labour market,” the EU official noted, citing as an example the “titres services” in Belgium and in France.

Don’t mix vouchers

The European Federation for Services to Individuals (EFSI), which represents stakeholders involved in the development of personal and household services (PHS) including domestic services, gardening, ironing, cleaning, and childcare services, believes that the Italian case should not undermine the multilevel benefits of social vouchers as implemented in countries like France and Belgium.

Moreover, the EFSI points out that a clear distinction among different vouchers’ schemes should be made.

“Social vouchers, including PHS vouchers, are based on key characteristics and should not be mixed up with other systems, also called vouchers,” EFSI’s Director Aurélie Decker said in a statement.

Social vouchers are coupons usually granted as a “reward” by employers or public authorities to citizens, providing them with access to predetermined goods or services. They are not exchangeable for money and can only be used within a limited network of merchants who are contractually linked to the issuer.

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Improving workers’ life

Backers of social vouchers claim that the working environment is improved and workers have the free choice to pick quality food. In addition, they stress that the whole system is transparent and helps governments have a closer taxation monitoring.

According to EFSI, social vouchers differ from the Buoni Lavoro scheme. “Each voucher programme is based on a specific national legislative framework, which is usually fine-tuned over the years to ensure that it meets its initial objectives,” Decker emphasised.

Regarding PHS activities, she highlighted that social vouchers help tackle challenges in the sector.

“They can render these activities more visible and make formal employment as well as administrative duties much easier for PHS users and workers,” the EFSI director noted.

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