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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Reform of inspection services, Italy

28 October 2009
  • Italy
Decree Law No. 124 of 23 April 2004 introduced reform of the labour inspection services. The aims were to improve coordination and information exchange between the various agencies involved, and to move beyond the traditional penalty based approach by also offering advisory services.
  • Type of measure:

Report on informal employment, Romania

28 October 2009
  • Romania
  • Sectors

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Regulations to promote regular employment, Italy

28 October 2009
  • Italy
  In 2001, the government passed a law promoting the regularisation of employment through the provision of substantial incentives. The government’s move was based on the assumption that undeclared work existed due to the high level of taxes and contributions to be paid. The law targeted companies, workers and employers throughout the country. The principal objectives were to enhance social security services for workers, improve tax compliance, combat unfair competition, and reduce the level of undeclared work.  
  • Type of measure:

    Changing attitudes: commitment to tax morality, Legitimising undeclared work, Prevention

‘On the Spot’ company set-up, Portugal

28 October 2009
  • Portugal
  In 2005, the Portuguese Secretary of State of Justice implemented an initiative in order to relieve the bureaucratic burden accompanying the setting up of new companies. By simplifying the administrative requirements, it is now possible to create a company ‘on the spot’ in a single office in a single day. Although it is not an explicit objective, this measure should contribute to combating undeclared work.  
  • Sectors

  • Type of measure:

    Legitimising undeclared work

Hidden economy monitoring group, Ireland

28 October 2009
  • Ireland
  This case example describes the role of the ‘Hidden economy monitoring group’ in tackling undeclared work. The group is part of a broader legal employment rights framework concluded by the government and the social partners under Ireland’s social partnership agreements. It has been accompanied by a number of other measures designed to tackle the informal economy, including the enactment of the Employment Law Compliance Bill.  
  • Type of measure:

    Changing attitudes: awareness raising, Deterrence: improve detection, Deterrence: increase penalties, Prevention

Street UK, United Kingdom

28 October 2009
  • United Kingdom
  Street UK is a non-profit organisation specialising in the provision of a range of financial services for those who cannot access mainstream credit and banking services. These services include not only the provision of loans but also of business advice and support, enabling micro-enterprises and self-employed people to make the transition from undeclared work into the declared economy.  
  • Type of measure:

    Legitimising undeclared work

Employment Act and the fight against illegal labour, Czech Republic

28 October 2009
  • Czech Republic
  In the Czech Republic, the first political steps against illegal employment were not taken until the start of this century. The 2004 Act on employment established a definition of illegal labour in Czech law and strengthened control mechanisms in this area. Prohibiting illegal employment and introducing penalties for offenders was certainly a step in the right direction in an effort to restrict this phenomenon. However, detecting illegal employment and enforcing the law in cases of undeclared work are still highly problematic in practice.  
  • Type of measure:

    Deterrence: improve detection, Deterrence: increase penalties

Tax enforcement unit for undeclared work, Germany

28 October 2009
  • Germany
  In 2004, a new administrative unit called the Tax Enforcement Unit for Undeclared Work (FKS) began its operations. FKS was set up to reduce undeclared work in order to relieve the burden on the payers of tax and social security contribution, social insurance organisations and the federal budget. However, an analysis by the Federal Court of Audit shows that the operations of FKS must be substantially improved if they are to tackle undeclared work more effectively.  
  • Sectors

  • Type of measure:

    Deterrence: improve detection

Preventing undeclared work among tour guides, Lithuania

28 October 2009
  • Lithuania
The Tourism and Promotion Division of Vilnius has been organising campaigns against the undeclared work of tour guides in the capital city of Lithuania since 2002. These campaigns aim to reduce the number of illegally operating guides in the capital, to secure the labour market for these workers, and to ensure the provision of professional information on the city and its history to tourists. The measure has been welcomed by legitimate tour guides.
  • Sectors

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Detection and prevention of illegal activities in the taxi business, Sweden

28 October 2009
  • Sweden
Over a three-year period, the National Tax Agency organised an extensive project seeking to identify and prevent illegal behaviour within the taxi business (Skatteverkets kontroll av taxibranschen). The efforts were aimed at tax evasion and undeclared work. As the project drew to a close, the National Tax Agency considered that the efforts had paid off and a substantial amount of previously undeclared activity had been exposed.
  • Type of measure:

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