Glossary

Inspections undertaken by the competent authority of one Member State on its territory, with participation of the competent authorities of one or more other Member State(s) concerned. Concerted inspections in the cross-border context are inspections undertaken by the competent authorities of two or more Member States simultaneously and related to the same case, with authorities in Member States operating in its own territory and with its own staff.

A measurable value that demonstrates how effectively an organisation is achieving its strategic objectives in relation to tackling undeclared work.

The functions of the system of labour inspection shall be: (a) to secure the enforcement of the legal provisions relating to conditions of work and the protection of workers while engaged in their work, such as provisions relating to hours, wages, safety, health and welfare, the employment of children and young persons, and other connected matters, in so far as such provisions are enforceable by labour inspectors; (b) to supply technical information and advice to employers and workers concerning the most effective means of complying with the legal provisions; and (c) to bring to the notice

Companies which have complied only with the bare essentials (e.g., book-keeping, administration) for organisation and registration in a particular country. The actual commercial activities are often carried out in another country. This is sometimes used to enable businesses to deviate from applicable legislation, resulting in violations of labour law or collective agreements, tax and/or social security compliance, leading to undeclared or under-declared work.

Less formal instrument than bilateral agreements, often setting out operational arrangements under a framework agreement on an international level. MoUs entail general principles of cooperation describing broad concepts of mutual understanding, goals and plans shared by the parties. They are usually non-binding. MoUs can cover agreements between enforcement bodies of different MS/EEA countries.

Cooperation between three or more countries.

An instrument for cooperation between two or more national institutions, eventually also involving cooperation with relevant stakeholders such as social partners to undertake activities defined either in law or policy to tackle undeclared work. National agreements can have many different forms such as legal prescriptions, memorandum of understanding, strategic documents and action plans, and executive orders.

Sometimes referred to as a ‘black list’, this is a list of businesses or individuals who have been non-compliant and therefore are regarded as unacceptable or untrustworthy, and often marked down for punishment (e.g., negative publicity) or exclusion (e.g., from tendering for public procurement contracts).

the practice of basing some of a company’s processes or services in another Member State, to take advantage of lower costs in the new location.

Related to the collaborative, sharing or gig economy, this is a business model where activities are facilitated by creating an open and online platform for the provision of services often provided either digitally or on-the-ground by private individuals. Emerging as a new form of organizing work and employment opportunities via platforms, it involves three categories of actors: (i) the platform (often large corporations); (ii) the service provider and (iii) the user/client. The relation between the platform and service provider is often unclear in terms of their employment status.

An employee sent by his/her employer to carry out a cross-border service in another EU Member State on a temporary basis under the freedom of provision of services. For example, a service provider may win a contract in another country and send his employees there to carry out the contract.  Posted workers are entitled by law to a set of core rights in force in the host Member State which include, for example, minimum rates of pay/remuneration, maximum work periods and minimum rest periods, minimum paid annual leave, occupational safety and health, etc.

Requesting a receipt from a business-to-consumer transaction allows the purchaser to enter a lottery, with a chance of winning a prize. The aim is to reduce the undeclared economy by limiting unreported exchanges through the greater issue of receipts.

An alternative approach to combining and sequencing the range of policy approaches and measures available with the purpose of promoting better compliance. This responsive regulation approach uses indirect measures first with citizens and businesses, then incentives, and deterrents only for those still failing to comply (cf. full policy operationalisation model which uses all measures concurrently). 

As part of the full policy operationalisation model, a structured process for the systematic identification, assessment, ranking, and treatment of labour, tax and social security law compliance risks (e.g., failure to register, failure to properly report tax liabilities etc.). This helps labour, tax and social insurance inspectorates to target their compliance activities.

An approach where the direct and indirect policy measures used to tackle undeclared work are specifically designed and targeted at one sector whose characteristics in terms of undeclared work are different from other sectors and whose problems and risk factors require a specific approach.

The state of working for oneself rather than an employer. A self-employed person is ‘pursuing a gainful activity for their own account, under the conditions laid down by national law'. As indicated by the European Commission in 2010, there are different understandings and definitions of the term self-employment across Member States.

A means of payment, subsidised by government, which allows a private user to pay an employee for conducting tasks. By providing service vouchers to those employing labour, which pays a portion of the fee given to the worker, the intention is to encourage those employing labour to purchase services on a declared rather than undeclared basis.

[Williams, C.C. (2018) Elements of a preventative approach: service vouchers and awareness raising campaigns, European Commission, Brussels.]

The shadow economy includes both undeclared work as well as broader criminal activities. Besides undeclared work, it therefore additionally includes the provision of goods and services that are themselves unlawful (e.g., the production or trafficking of illegal drugs, human trafficking or money laundering forbidden by law).

Employing a firm or person outside one’s company to do work as part of a larger project.

A limited-time offer by a government to a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period(s), as well as freedom from legal prosecution.

[Baer, K. and E. LeBorgne (2008), Tax Amnesties: theory, trends and some alternatives, Washington DC: International Monetary Fund.]