Coordinated strategy against undeclared work, France

Since 1997, France has been working towards a more integrated approach in its efforts to combat illegal and undeclared work. Institutions have been set up, most notably the Interministerial Delegation for Combating Illegal Work (Délégation Interministérielle à la Lutte Contre le Travail Illégal, DILTI), as well as agencies at regional and local level. The coordinated strategy has focused on the economic sectors most prone to undeclared work.

Background

Based on the assumption that the fight against undeclared work is hindered by a lack of coordination among partners at operational and/or strategic level, France decided to pursue a coordinated approach towards combating undeclared work not only at the level of national government but also at local and regional level. This integrated approach also involves social partners at all levels.

Objectives

The aim of the initiative is to coordinate governance at both strategic and operational level in relation to combating undeclared work in order to improve the effectiveness of the fight against such work.

Specific measures

Since 11 March 1997, a law (Decree No. 97-123) has been in place that allows the creation of a more coherent structure of governance in France when tackling undeclared work. This decree ensures not only full cooperation between the numerous central government departments with various responsibilities for combating undeclared work but also an important role for regional and local government, as well as trade union and employer organisations at all levels (Central Agency for Social Security Organisations (Agence centrale des organismes de Sécurité sociale, ACOSS), 2004; Interministerial Delegation for Combating Illegal Work (Délégation Interministérielle à la Lutte contre le Travail Illégal, DILTI), 2002, 2004a, 2004b).

Interministerial bodies

The Interministerial Committee for Combating Illegal Work (Comité interministériel pour la lutte contre le travail illegal, CILTI) is chaired by the prime minister and involves all ministers of departments with a responsibility for tackling such work. This committee provides the overall coordinating role in all government matters concerning the fight against illegal work. At the next level is the National Commission for Combating Illegal Work (Commission nationale de lutte contre le travail illégal). This is composed of senior civil servants representing central government departments and agencies involved in the fight against undeclared work; it is chaired by the Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs (Ministère du Travail, des Relations sociales, de la Famille, de la Solidarité et de la Ville). Other participants comprise representatives from a range of social partners including national employer and employee federations, and representative organisations of various professions. The national commission’s role is to coordinate the actions decided by the ministers in the Interministerial Committee.

The Interministerial Delegation for Combating Illegal Work (Délégation Interministérielle à la Lutte contre le Travail Illégal, DILTI) is the secretariat of the national commission and its mission is to coordinate all administrative departments and units with responsibility for tackling undeclared work. The minister of labour, social relations, family affairs, solidarity and urban affairs is responsible for DILTI and reports directly to the prime minister. This delegation is composed of about 40 civil servants from originally seven ministries – justice, employment, interior, defence, finance, transport and agriculture. It communicates the policy decisions to all of the regional and local functionaries, as well as the various social partners, responsible for tackling undeclared work. About three quarters of the employees in DILTI work in Paris, while the rest are based in the southern cities of Marseille and Toulouse. Its coordinating role involves:

• attending to the implementation of policy measures;
• providing assistance to the inspection services and magistrates, including the provision of specialised documents, reference books and periodical publications;
• providing a central institution for the analysis of all information concerning undeclared work;
• developing partnerships with professional organisations that represent the economic sectors affected by undeclared work;
• presenting to public authorities measures that would improve the efficiency of the fight against undeclared work.

Local institutions

The 1997 law recognised that undeclared work is a geographically diverse problem and that it is necessary to introduce some flexibility in order to tailor policy to local circumstances. It therefore provided for the establishment of local institutions to take a coordinating role in the fight against undeclared work. The result is that in every départment, Departmental Commissions – in effect, local DILTIs – have been set up to bring together all of the governmental actors and social partners involved in tackling undeclared work; these commissions are chaired by the local mayor. Their role is to implement at local level the programme of the national DILTI, taking into account their knowledge of the local environment. They are also responsible for producing annual reports of the situation in their domain of competence and for preparing action plans.

In addition to these more strategic Departmental Commissions are local units whose function is to coordinate the operational side in the fight against undeclared work. Known as Operational Committees for Combating Illegal Work (Comités opérationnels de lutte contre le travail illegal, COLTI), these are chaired by magistrates and bring together actors with an interest in compliance; they also ensure that the various agencies act in a coordinated manner. The permanent secretary of COLTI is responsible for ensuring that information sharing occurs and that technical information is disseminated, as well as being responsible for organising the coordination of operations. COLTI also provides technical details on new civil and administrative penalties for different activities and outlines the priorities set by the central government. In 2002, a further level was introduced when regional action units (groupements d’intervention régionaux, GIR) were created in all regions.

Sectoral focus

Since the inception of this formal structure, the central government has issued few new edicts, programmes or policies to the localities and regions. Indeed, after 1998, the National Commission did not meet again until June 2004 when it drew up a new plan of action for undeclared work. This 2004 plan adopted a sectoral approach that focuses on four industries: live and recorded entertainment, agriculture, construction and civil engineering, and the hotel, restaurant and café sector. In 2006, this focus was expanded to cover four more fields of economic activity, including removals, house-minding, confectionery and live event industries. Across all of these eight sectors, the relevant trade union and employer organisations are now involved in working with DILTI at national, regional and local levels to tackle undeclared work in partnership-based arrangements, although the central government takes the lead role. There is also a renewed emphasis on data sharing both within and between the national, regional and local levels, as well as on a cross-border basis with other EU Member States.

Evaluation and outcome

Achievement of objectives

France has achieved a highly integrated system of governance in terms of tackling undeclared work not only at national level but also at local and regional levels, and this coordinated approach involves the full range of social partners at all levels.

Whether this has therefore improved the rate of detection of undeclared work is not known. Although it is often assumed that greater coordination of partners at strategic and operational level will automatically lead to an improvement in the rates of detection, no data are available to confirm that this has happened.

Obstacles and problems

The creation of this structure appears to have occurred without any reported obstacles or problems, according to the reports published. The principal problem, therefore, is that no reviews have been provided of the difficulties encountered and how these were overcome – in order to provide lessons for others – and no evaluations have been conducted on the effectiveness of integrating strategy and/or operations.

Lessons learnt

This initiative reveals that it is wholly feasible to coordinate governance in both operational and strategic terms not only at national level but also at local and regional levels. Moreover, it is also possible to do so by seeking the cooperation of an array of social partners.

Impact indicators

In 2004, 71,840 inspections were conducted in the four targeted economic sectors and, in 2005, a further 59,256 companies were inspected in these priority areas. In 2006, 67,135 worksites were inspected. In 2005, 3,054 companies were identified as contravening labour laws, with a total of 9,747 violations, while in 2006, 6,977 violations were found. Moreover, DILTI reported a large increase in unpaid taxes recovered since 2003, amounting to €17.6 million in 2005. This total doubled in 2006, with €40 million in unpaid taxes being collected. The implication from this marked increase in unpaid taxes recovered is that the combined approach targeted at specific sectors has reaped rewards.

No evaluations of the effectiveness of the integrated strategy and operations in France in relation to tackling undeclared work have been made public. At its simplest level, such an evaluation might involve a comparison of the cost-yield ratio of the French system prior to the implementation of an integrated governance and afterwards. For example, it might be found that for every €1 spent on detecting undeclared work, about €2 was recovered in extra tax prior to DILTI but €3 afterwards, despite the same resources being invested, thus signifying that coordinating governance has improved the effectiveness of detection. So far, however, no information is available on the cost-yield ratio of the more integrated French system in order to evaluate its marginal net benefits in terms of improved tax recovery. This would be required before any decision can be taken regarding the transferability of a more integrated approach.

Transferability

This policy measure of coordinating the fight against undeclared work using an integrated approach not only at national level but also at regional and local levels – and involving all social partners in partnership-based arrangements at all levels – is certainly worth considering for other countries. Before doing so, however, it would be useful to have an evaluation of the marginal net benefits of pursuing such an approach, such as the resultant improvements in the cost-yield ratio. At present, it is assumed that the coordinated approach has improved the effectiveness of tax recovery and the fight against undeclared work but this is not an evidence-based finding.

Contacts

Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs (Ministère du Travail, des Relations sociales, de la Famille, de la Solidarité et de la Ville), http://www.travail.gouv.fr

Bibliography

Central Agency for Social Security Organisations (Agence centrale des organismes de Sécurité sociale, ACOSS), L’evaluation de l’économie souterraine: un recensement des études, Paris, ACOSS, 2003.

ACOSS, Lutte contre le travail illégal: bilan 2003, Paris, ACOSS, 2004.

Interministerial Delegation for Combating Illegal Work (Délégation Interministérielle à la Lutte contre le Travail Illégal, DILTI), Plaquette de présentation de la DILTI, 2002.

DILTI, Commission Nationale de Lutte Contre le Travail Illégal, Paris, Ministry of Employment, Work and Social Cohesion (Ministère de l’Emploi, du Travail et de la Cohésion Sociale) – now the Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs (Ministère du Travail, des Relations Sociales, de la Famille, de la Solidarité et de la Ville), 2004a.

DILTI, 3eme Comité National de Lutte contre le Travail Illégal, Paris, Ministry of Employment, Work and Social Cohesion – now the Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs, 2004b.

National Commission for Combating Illegal Work (Commission Nationale de Lutte Contre le Travail Illégal), Bilan du plan national de lutte contre le travail illégal 2004–2005 et perspectives 2006–2007, Paris, Ministry of Employment, Social Cohesion and Housing (Ministère de l’emploi, de la cohésion sociale et du logement) – now the Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs, 2006.

Research and Statistics Department (Direction de l’Animation de la Recherche, des Études et des Statistiques, DARES) of the Ministry of Labour, Social Relations, Family Affairs, Solidarity and Urban Affairs, Bilan 2007: lutte contre le travail illégal, Paris, DARES, 2008.

Windebank, J., ‘Joining-up national and local actions to tackle undeclared work: some lessons from France’, Local Governance, Vol. 30, No. 4, 2004, pp. 188–198.

Colin C. Williams and Jan Windebank, University of Sheffield