- Member States still getting to grips with the single labour market
- Fraudulent contracting of work: Bogus self-employment (Czech Republic, Spain and UK)
- Fraudulent contracting of work: Abusing fixed-term contracts (Belgium, Estonia and Spain)
- Fraudulent contracting of work: Abusing the posting of workers (Belgium, Finland and Italy)
- Fraudulent contracting of work: Sham companies (Austria, Estonia and Italy)
- Fraudulent contracting of work: Abusing traineeship status (Austria, Finland, Spain and UK)
- Exploring the fraudulent contracting of work in the European Union
- Tackling undeclared work in 27 EU Member States and Norway: Approaches and measures since 2008
Fraudulent work
29 July 2019
Fraudulent practices in the field of work have significant consequences for labour markets, economies and social cohesion. The misuse of employment relations to sidestep regulations is a concern for employers, trade unions and governments. It affects competition, labour market integration, social protection and working conditions.
Policymakers are seeking to address violations of basic protections resulting from the fraudulent use of employment or commercial contracts in cross border and domestic practices. Several important steps have recently taken place at EU level. The 2014 Enforcement Directive on the posting of workers aims to address issues related to fraud, circumvention of rules and exchange of information between Member States. Ongoing discussions on undeclared work are facilitated by the European platform against undeclared work.
- EUR-Lex: Directive 2014/67/EU on the enforcement of Directive 96/71/EC concerning the posting of workers
- European Council: Fighting against undeclared work
Eurofound’s work
Eurofound has carried out research on regular employment, undeclared work and more recently the fraudulent contracting of work in the EU and Norway.
Recent research aims to better understand the fraudulent forms of contracting work and the impacts on workers and working conditions, as well as on business competition and collective bargaining. It seeks to explore policy measures initiated by national authorities and social partners to identify, prevent and combat such practices. While the recent policy debate at European level has focused mostly on cross-border fraudulent practices, evidence of domestic fraud also challenges the implementation of national labour laws and the regulation of taxes.
An initial mapping exercise across the EU28 and Norway reported on seven prevalent fraudulent contracting of work practices. Fraudulent practices can occur through employment relationships, such as fixed-term contracts, posting of workers and traineeship status, or through other commercial forms, such as self-employment and the creation of companies. The abuse of self-employment and freelance work, the abuse of fixed-term employment and the posting of workers were reported most by countries.
Featured: Fraudulent contracting of work: Definition (Eurofound 2016)
It is possible to identify the fraudulent use of an employment/contractual relationship when two conditions are simultaneously met:
- A specific employment/contractual arrangement is used to hire workers or to subcontract certain activities that involve the performance of work;
- The factual circumstances of the specific employment/contractual relationship do not correspond to the (legal/formal) requirement that qualify that specific form of contracting work, directly via an employment relationship or indirectly through a subcontracting relationship.
Publication: Exploring the fraudulent contracting of work in the European Union (November 2016)
Blog: Member States still getting to grips with the single labour market (July 2019), based on a working paper on joint cross-border labour inspections and evidence gathered in their course
The analysis then explored the impact of five of these fraudulent contracting practices on the rights of workers and businesses (omitting temporary agency work and on call/casual work):
- bogus self-employment
- abusing fixed-term contracts
- abusing the posting of workers
- sham companies
- abusing traineeship status.
The research focused on eight countries: Austria, Belgium, Czech Republic, Estonia, Finland, Italy, Spain and the UK.
Employment practices were examined in three sectors (construction, industrial cleaning and road haulage) across at least three of the following countries: Austria, Finland, France, Poland and Spain.
This work builds on previous Eurofound research on posted workers, non-standard employment and undeclared work in Europe. The European Observatory of Working Life (EurWORK) also occasionally reports on fraudulent and undeclared work practices at national level.
Data and resources
- European Industrial Relations Dictionary: Atypical work, economically dependent worker, posted workers, precarious work, self-employed person, temporary agency work and undeclared work.
- Data: Tackling undeclared work in Europe (case studies and other publications)
Ongoing work
Highlights (9)
Todo(s) (64)
- Member States still getting to grips with the single labour market
- France: latest working life developments Q2 2018
- Stamping out fraud in hiring practices across Europe
- Greece: Latest working life developments – Q4 2017
- Norway: Strategies to tackle work-related crime
- Tackling fraudulent contracting of work in EU: Challenges and responses
- Romania: Efforts to fight undeclared work continue
- Bulgaria: Fall in share of informal economy
Publications (23)
- Member States still getting to grips with the single labour market
- Stamping out fraud in hiring practices across Europe
- Fraudulent contracting of work: Bogus self-employment (Czech Republic, Spain and UK)
- Fraudulent contracting of work: Abusing fixed-term contracts (Belgium, Estonia and Spain)
- Fraudulent contracting of work: Abusing the posting of workers (Belgium, Finland and Italy)
- Fraudulent contracting of work: Sham companies (Austria, Estonia and Italy)
- Fraudulent contracting of work: Abusing traineeship status (Austria, Finland, Spain and UK)
- Pay inequalities experienced by posted workers: Challenges to the ‘equal treatment’ principle
Articles (35)
- France: latest working life developments Q2 2018
- Greece: Latest working life developments – Q4 2017
- Norway: Strategies to tackle work-related crime
- Romania: Efforts to fight undeclared work continue
- Bulgaria: Fall in share of informal economy
- Greece: Parties commit to national social dialogue following 2017 National General Collective Employment Agreement
- Cyprus: Latest working life developments – Q2 2017
- Romania: Latest working life developments – Q2 2017