One of the tasks of the European Labour Authority (ELA) is to support Member States in tackling undeclared work. On 26 May 2021, the European Platform tackling undeclared work was set up as a permanent working group at ELA.
At EU level, undeclared work is defined as "any paid activities that are lawful as regards their nature, but not declared to public authorities, taking into account differences in the regulatory systems of the Member States".
Undeclared work may come in different forms
- The most common type is work carried out in a formal undertaking, partially or fully undeclared. Partially undeclared work is sometimes also called "under-declared work", "envelope wages" or "cash-in-hand";
- Another type is undeclared "own account" or self-employed work, where self-employed persons provide services either to a formal enterprise or to other clients, such as households;
- Undeclared work occurs in all kind of economic sectors, both within countries and across borders. It is often carried out in sectors like construction, renovation or repair works, gardening, cleaning, provision of childcare or HORECA (Hotel / Restaurant / Catering – food services).
Undeclared work is everybody's problem
Undeclared work is a persisting challenge negatively affecting workers, businesses and governments across Europe.
A new Special Eurobarometer survey carried out in 2019 shows that in the EU:
- One in ten Europeans say they have purchased in the past year goods or services that might include undeclared work. Europeans are most likely to have purchased undeclared goods or services for home repairs or renovations.
- One third of Europeans know someone who works undeclared.
- Half of Europeans perceive the risk of being detected by authorities as low.
Fighting undeclared work
The main responsibility for tackling undeclared work lies with national authorities. The fight against undeclared work relies mostly on three types of enforcement bodies:
- Labour inspectorates addressing abusive behaviour regarding working conditions and/or health and safety norms;
- Social security inspectorates fighting fraud on social insurance contributions;
- Tax authorities dealing with tax evasion.
Additionally, in some Member States, social partners are also involved in these tasks, as well as customs authorities, migration bodies, the police and the public prosecutor's office.
Within the last ten years, all Member States introduced various measures to step up their efforts in the fight against undeclared work, given its negative consequences. Most of them are in the area of deterrence measures to influence people's behaviour with stricter sanctions or focusing on more effective inspections. In addition, Member States use preventive measures such as
- tax incentives
- awareness raising
to decrease the incidence of undeclared work and facilitate compliance with existing rules.
European Platform tackling undeclared work
The European Platform tackling undeclared work supports the activities of the Authority in tackling undeclared work. It enhances cooperation between Member States' relevant authorities and other actors involved to fight undeclared work more effectively and efficiently while fully respecting national competences and procedures.
- helps EU countries to better deal with undeclared work in its various forms
- drives change at national level
- promotes better working conditions and formal employment
- aims to increase awareness of issues related to undeclared work
This EU-level forum allows different actors, including social partners and enforcement authorities, such as labour inspectorates, tax and social security authorities, to
- exchange information and good practices
- learn from each other and together
- develop knowledge and evidence
- engage in closer cross-border cooperation and joint activities
The work programme for 2021-2022 reflects the realities of tackling undeclared work in a difficult economic context. It aims to deepen understanding of (new) types of undeclared work and sectors particularly exposed (e.g. in relation to the collaborative economy, seasonal work, personal and household services as well as HORECA) whilst supporting partnerships, innovation and capacity building, as well as increasing public awareness of undeclared work. The transition of the Platform to the European Labour Authority as a permanent working group provided new opportunities to address these challenges in a more integrated and comprehensive way.
Funding for the activities of the European Platform is provided by the European Union Programme for Employment and Social Innovation (EaSI) 2014-2020.
The Platform is composed of
- Members: representatives of the Member States, for example from federal ministries, labour and social inspectorates, tax and customs authorities or social insurance agencies, of EU level cross-industry social partners and of the Commission.
- Observers: representatives of social partners representing the sectors most affected by undeclared work, Norway and Iceland as members of the European Economic Area and organisations like Eurofound, the European Agency for Safety and Health at Work (EU-OSHA) and the International Labour Organisation (ILO).
- Members and Observers of the Working Group