Undeclared work

12 Maj 2020

Beyond national variations, at European level undeclared work involves ‘any paid activities that are lawful as regards their nature but not declared to public authoritiesRead more

Beyond national variations, at European level undeclared work involves ‘any paid activities that are lawful as regards their nature but not declared to public authorities’. Common types include work carried out in a formal undertaking, which is partially or fully undeclared, and undeclared ‘own account’ or self-employed work.

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Recent updates

All aboard: Hauling undeclared workers onto the pandemic rescue boats

A debate has started in Italy about the support that the state should provide to undeclared workers operating in the...

Improving the monitoring of posted workers in the EU

The debate about the posting of workers in the EU, its economic and social consequences, and ways to manage it is...

Casual work: Characteristics and implications

Casual work, both intermittent and on-call, contributes to labour market flexibility and is therefore increasingly used...

EU context

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Undeclared work remains a widespread phenomenon around the world. Workers, employers and governments across the EU all experience the negative effects of undeclared work on labour rights, health and safety, social security and taxation.Read more

Undeclared work remains a widespread phenomenon around the world. Workers, employers and governments across the EU all experience the negative effects of undeclared work on labour rights, health and safety, social security and taxation. However, assessing the scale of the phenomenon is inherently challenging. European Commission 2018 data estimate undeclared work at about 11.6% of total labour input in the EU private sector and 16.4% of gross value added.

Over the years, national authorities have adopted different policy approaches. Deterrence-based measures aim to improve detection tactics or increase penalties, while compliance-based approaches aim to prevent people from taking up undeclared work, to legitimise previously undeclared work, or to change attitudes.

The EU institutions have put in place a range of initiatives to help reduce the incidence of undeclared work. The creation of the European Platform tackling undeclared work in May 2016 is among the EU-level initiatives to support these efforts. The Platform brings together relevant authorities and actors involved in fighting undeclared work, to tackle this issue more effectively and efficiently, while fully respecting national competences and procedures. Since June 2019, the Platform is a permanent working group, contributing to the work of the European Labour Authority. 

The Platform promotes cooperation between the Commission, social partners and national authorities in preventing and deterring undeclared work, particularly in sectors where it is common: agriculture, aviation, tourism, construction, security services, cleaning, provision of childcare, commerce, road transport and hotels, restaurants and catering. This means all stakeholders working together to exchange information, especially in cross-border situations. 

Fair work, fair play: EU campaign to declare work 2020

The Platform’s work programme 2019–2020 outlined its plan to implement its first information campaign in 2020. The activities of the #EU4FairWork campaign will focus on raising awareness with companies and workers about the benefits of declared work. This includes providing information to workers on their rights and the transition to declared work, to companies on benefits, obligations and sanctions, and to policymakers on the need to act.

The COVID-19 pandemic has obliged the Platform to revise the planning of its #EU4FairWork campaign, extending it and postponing the European Week of Action to September 2020. As an observer contributing to the Platform’s discussions and the ELA’s work, Eurofound will take part in the campaign.

Eurofound’s work on undeclared work links in with the Commission’s 2019–2024 priority on a stronger Europe in the world. 

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Research

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Eurofound has carried out various research activities over the years on undeclared work, as well as on closely related topics such as fraudulent work, posting of workers and other new forms of employment. 

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Eurofound has carried out various research activities over the years on undeclared work, as well as on closely related topics such as fraudulent work, posting of workers and other new forms of employment. 

Measures tackling undeclared work

Eurofound research in 2013 looked at policy approaches and measures that have been implemented to tackle undeclared work in 27 EU Member States and Norway since the beginning of the recession in 2008. The analysis provided examples of potentially good practice policy measures that Member States might wish to further consider. 

Fraudulent contracting of work

Taking a broader view on circumventing labour, social and tax regulations, the research path followed since 2016 has highlighted the importance of fraudulent contracting of work. In general, research has focused on pushing the boundaries of misused employment relationships beyond undeclared activities. In-depth analysis of several types of employment relationships, such as fixed-term contracts, posting of workers and self-employment, and in different sectors, such as road haulage, construction and industrial cleaning, has put the spotlight on the connections between undeclared work and fraud.

Posted workers

Research on the situation of posted workers across the EU emphasises the importance of identifying this cross-country phenomenon, specifying obligations and rights applicable in these situations and recalling the criteria to distinguish between genuine and bogus posting. It also underlines the consequences of the misuse of posting for workers, businesses and governments. Assessing and monitoring the posting of workers present challenges like those of undeclared work situations. Indeed, labour inspectorates face similar difficulty in identifying the circumvention of regulations, increased by cross-border characteristics.

New forms of employment

Recent trends in the labour market, including the increasing flexibility of employment relationships and technological development, have led to a rise in new forms of employment, such as casual work or platform work. Eurofound research highlights the challenges these forms of contracting work bring to labour law, labour rights, social protection and benefits, and tax regulations. Some of these new forms have been developed to help formalise undeclared work practices. However, the links between new forms of contracting work and undeclared work are not straightforward and have to be closely monitored. 

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Policy pointers

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  • Favouring a holistic approach to tackling undeclared work: It is important to use several measures and policies covering both prevention and deterrence to help avoid the development of and introduce sanctioning of existing undeclared work situations.Read more
  • Favouring a holistic approach to tackling undeclared work: It is important to use several measures and policies covering both prevention and deterrence to help avoid the development of and introduce sanctioning of existing undeclared work situations. All stakeholders should cooperate with a view to devising the best ad hoc response in the context.  
  • Fostering compliance with regulation: Advice could be developed to support companies on their path to compliance, especially small and medium-sized enterprises. Expertise and adequate resources in the bodies tasked with monitoring compliance needs to be ensured. 
  • Developing workers’ information and voice: Raising awareness of rights, providing workers with practical, easy-to-understand information and encouraging them to negotiate for their rights are important. This would mean supporting employee representation at all levels, helping to denounce fraudulent situations. 
  • Monitoring business models as part of the employment equation: Certain business models, like the platform industry or work on demand, need to be monitored given their potential impact on employment relationships and work organisation. 
  • Ensuring flexibility and protection in parallel: Regulation is needed to balance protection of workers with a company’s need for flexibility. This is an important step to ensure stability and better knowledge of and respect for the rules. 
  • Addressing the consequences of precarious work: It will be necessary to raise awareness of the impacts of precarious employment on workers and on business models. The assumption of precarious employment is that it involves relationships that do not deliver for workers what a ‘good job’ should: skills recognition and improvement, resources (especially financial) with a view to making ends meet and developing employability. 
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Publications & data

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The sections below provide access to a range of publications, data and ongoing work on this topic.

  • Publications (12)
  • Data

Data