Standing groups to control illegal work, Lithuania
In order to tackle undeclared work more effectively, in 2011 the State Labour Inspectorate set up standing groups to control illegal work in Lithuania’s five largest cities to undertake control and prevention of undeclared work. The groups consist of VDI inspectors (lawyers) who were provided with appropriate resources. Where necessary, assistance can be sought from representatives of other institutions. The results show that this initiative has contributed to better detection of undeclared work compared to previous years.
In the environment of traditionally low income level (wages included) and relatively heavy tax burdens, business in Lithuania often tends to use various forms of undeclared work (undeclared work). The financial and economic crisis of 2009 has exacerbated these problems even more and contributed to the increase of the undeclared work phenomenon.
Before 2011, undeclared work control was undertaken exclusively by carrying out inspections (complex inspections of selected companies, see /ef/observatories/eurwork/case-studies/tackling-undeclared-work-in-europe/inspection-of-undeclared-work-lithuania). In order to tackle undeclared work more effectively, a decision was passed in 2011 to set up ad hoc undeclared work control groups that would concentrate their activities exclusively on undeclared work control.
In 2011, the State Labour Inspectorate (VDI) set up standing groups on illegal work control in the five largest cities to undertake control and prevention of undeclared work not only within their own counties, but also in the neighbouring ones. Resources allocated for undeclared work control – transport, technical and human resources – were likewise increased and optimised. Each standing group consists of two VDI inspectors (lawyers), who are provided with a car, video camera and photographic camera.
There are four standing groups on illegal work control operating in the Vilnius region; Kaunas region has three, and the Klaipėda, Šiauliai and Panevėžys regions have two s each. In addition, there is one group coordinator in each region.
Activities of the members of the standing group are exclusively related to undeclared work control; they carry out operational activities, i.e., after being alerted on the alleged use of undeclared work the members of the standing group pay a visit to the company and, having discovered illegal employees, make records of their findings and prepare a case of administrative offence to be heard in court. In addition, the members of the standing group themselves represent the public interest in judicial proceedings concerning the use of undeclared work.
As undeclared work control is undertaken by the inspectors of standing group trained in a specific specialisation (law), this has improved the quality of collected evidence and administrative remedies applied.
The standing group is comprised of VDI employees, but officers from other institutions (State Tax Authority (VMI), police (PD), Financial Crime Investigation Service (FNTT), etc.) are also frequently invited to assist the NNDKG in conducting the inspections.
Outcome of evaluations: lessons and conclusions
Achievement of objectives
According to the VDI, with standing group in place, detection of undeclared work incidents more than doubled in 2011 compared to the previous year.
Obstacles and problems
According to the VDI, in order to increase the effectiveness of combating undeclared work even more, the number of the group should be increased in every county, but the available resources are insufficient for this. The same refers to better technical provisions for the group, better access to various databases, etc.
The VDI also pointed out that, as a rule, courts impose administrative penalties for undeclared work that are milder than under the law, and this can be identified as a problem that reduces the effectiveness of the standing group. According to the VDI, such a situation not only prevents attaining the purpose of the penalty, but rather leads to an opposite result where a perpetrator is encouraged to commit new offences, because the penalty imposed by the court is too insignificant compared to the received financial advantages.
Experience of the standing group activities demonstrates that, despite highly expeditious and effective functioning of the groups, access to the databases (VMI, PD, etc.) that are now accessible only by the field services of other institutions would be a weighty contributor to the quality and effectiveness of their work. Therefore, broader powers of the standing group should be sought in the future.
According to the VDI, while conducting undeclared work control there are incidents when illegal workers themselves impede the standing group in the performance of their duties or fail to comply with lawful requirements of the standing group. However, the currently valid laws do not provide for any liability to such persons. In response to this, the VDI has drawn up and submitted a draft of relevant legislative amendments providing for liability to all persons impeding VDI inspectors in performance of the duties delegated to them.
The VDI does not provide detailed statistical and financial information on standing group activities. According to rough estimates, from 1 May 2011 (i.e., from the date of establishment of the standing group) the group conducted over 2,300 undeclared work inspections or around 80% of total undeclared work inspections during the mentioned period.
From May to December 2011, the standing groups on illegal work control detected around 80% of total illegal workers (approx. 700 out of 900).
As construction, wholesale trade and retail trade, agriculture, hotels and restaurants are deemed to be the most risky sectors of economic activities in terms of undeclared work, standing group activities are mainly focused in these sectors, too.
As already mentioned, the standing group functions in Lithuania’s five largest cities. According to the VDI, undeclared work is also mainly concentrated in the largest cities in Lithuania. Therefore, the VDI does not find it reasonable to set up NNDKG in other Lithuanian counties.
With regard to the application of this practice in other countries, VDI believes such practice could be (and is) easily applied in other countries, too.
Mr Gediminas Noreika, Deputy Head, Law Unit, State Labour Inspectorate.
Information on illegal work provided by the VDI.
2012 Action Plan for control of officially unaccounted economic phenomena. Approved on 14 February 2012.
Annual Report of the VDI, 2011.
Inga Blaziene, Institute of Labour and Social Research