Tackling undeclared work database

Undeclared work can be defined as work which is in itself legal but is not declared to the authorities for tax, social security and/or labour law purposes. Across the 28 Member States of the European Union, a great deal of effort is being invested into developing and testing policy measures that aim to tackle undeclared work.

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Kindergarten Act, Slovenia

02 June 2013
  • Slovenia
  The Prevention of Illegal Work and Employment Act adopted in 2000 (and amended in 2006, 2010 and 2012) sets out to combat the extent of undeclared work with specific regulations. In 2008, the Kindergarten Act (Zakona o vrtcih, ZVrt) was amended. Aimed at reducing undeclared childcare work, it defined the status of guardian in relation to children at home and stipulates that childcare at home can be carried out by natural persons who have been registered at the Ministry of Education and who satisfy conditions in relation to education and impunity for crimes.  
  • Type of measure:

    Legitimising undeclared work, Prevention

Let’s stop undeclared work campaign, Slovenia

02 June 2013
  • Slovenia
 
  • Type of measure:

    Changing attitudes: awareness raising, Changing attitudes: commitment to tax morality

New law on foreign workers, Turkey

02 June 2013
  • Turkey
  On 1 February 2012, a new law on the residence and travel of foreigners in Turkey came into force. This law brings to an end the so-called ‘visa runs’ by foreigners living in Turkey without a residency. For foreigners working in the undeclared economy in Turkey, this new law represents a significant obstacle to continuing their activities.   Background
  • Type of measure:

    Deterrence: improve detection, Deterrence: increase penalties

Crèches Act to legalise childcare workers, Poland

02 June 2013
  • Poland
  In 2011 the Polish parliament adopted the so-called Crèches Act. The law opens the way for parents of young children to choose an alternative path to the organised care provided in childcare establishments, such as officially hiring a nanny. The response has not been significant, yet the government is not discouraged and plans to continue on the legislative path to reach other groups of workers trapped in the shadow economy and create possible exits for them.  
  • Type of measure:

    Legitimising undeclared work, Prevention

Reverse charge VAT in the construction industry, Sweden

02 June 2013
  • Sweden
  Undeclared work accounts for about half of the total tax gap in Sweden and the country has taken important measures to tackle undeclared work, especially in sectors such as commerce, construction and other sectors with high cash turnover. To tackle VAT fraud and undeclared work in the construction industry, the government introduced a law on reverse charge VAT effective from 1 July 2007. The reverse charge means that the buyer becomes liable for the payment of VAT.  
  • Type of measure:

    Legitimising undeclared work, Prevention

Labour Inspectorate controls, Ireland

02 June 2013
  • Ireland
  Ireland’s Labour Inspectorate plays a major role in regulating the Employment Permits Acts to prevent undeclared work relating to the illegal employment of foreign workers. Inspections also provide an opportunity to inform employers of the requirements of legislation, discuss best practice for compliance and deal with queries they may have.  
  • Type of measure:

    Deterrence: improve detection

Back to work enterprise allowance, Ireland

02 June 2013
  • Ireland
  The Back to work enterprise allowance is an activation measure aimed at promoting self-employment and acting as a disincentive to the so-called ‘shadow economy’. It is designed to encourage the long-term unemployed to take up self-employment opportunities by allowing them to retain a proportion of their social welfare payment plus other benefits over a two-year period. An evaluation by consultants indicates that the scheme was quite successful in terms of creating employment.  
  • Type of measure:

    Legitimising undeclared work, Prevention

National strategy to reduce illegal work, Romania

02 June 2013
  • Romania
  In view of the high level of informal work in the country, in June 2009 the Romanian Government (Guvernul României) signed a Memorandum of Understanding with the European Commission for the purpose of creating a ‘Mechanism to monitor, control, and reduce the rate of illegal work in Romania’. The national strategy and action plan form an integral part of an inter-institutional approach to tackle the problem of undeclared work, which includes stiffer penalties for employers found to be in breach of the regulations.  
  • Type of measure:

    Deterrence: improve detection, Deterrence: increase penalties

Registration requirement for temporary agencies, the Netherlands

02 June 2013
  • Netherlands
  On 1 January 2012, several labour laws came into effect aimed at combating illegal employment and labour exploitation. The legislation marks a new area in which government (and the national Labour Inspectorate) intends to play a more active supervisory role. In particular, the law re-introduced the requirement for temporary employment agencies to be registered. Agencies that are not registered with the trade register held by the Chamber of Commerce will be fined, as will companies that hire staff from such agencies.  
  • Type of measure:

    Deterrence: improve detection, Deterrence: increase penalties

Amendment to Social Insurance Law, Cyprus

02 June 2013
  • Cyprus
  The Ministry of Labour and Social Insurance has introduced several measures to combat undeclared and illegal employment in Cyprus. Among these measures is an amendment to the Social Insurance Law of 2010 specifically to oblige employers to present, whenever requested, a copy of a specific employment attestation for its employees.  
  • Type of measure:

    Legitimising undeclared work, Prevention

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