Tackling Undeclared Work in the Construction Industry: A Learning Resource
A Learning Resource from the Construction Seminar of the European Platform Undeclared Work, European Commission, Brussels, 3rd May 2017
Posted: 9 Aug 2017
Date Written: May 3, 2017
On 3 May 2017, the European Platform Tackling Undeclared Work organised a seminar in Brussels on Tools and approaches to deal with undeclared work in the construction sector. The seminar brought together Platform members and observers from 21 EU Member States (MS) and Norway (EEA) representing labour inspectorates and social security, tax and customs authorities, as well as national and European social partner representatives from the construction sector.
The key findings were: • 19% of all undeclared work in the EU-28 is undertaken in the construction sector.
• The proportion of all undeclared work that is in the construction sector varies from 34% in AT, 32% in LU and 30% in SL and CY, to just 11% in ES and IT and 9% in DE. A focus upon the construction sector when tackling undeclared work is therefore more important in some MS than others.
• Although some undeclared workers in the construction industry do so out of necessity, as a last resort in the absence of alternative means of livelihood (such as illegal migrant workers), others seem to operate on an undeclared work basis out of choice (such as some self-employed craftspeople doing home repair, maintenance and improvement).
• Policy approaches range from direct controls that seek to alter the costs of undeclared work and/or benefits of operating on a declared basis, to indirect controls that seek to encourage voluntary compliance of suppliers and purchasers of construction services.
• The workshop revealed that most emphasis is at present on altering the costs of undeclared work by increasing the perceived or actual probability of detection, such as by using ID cards, supply-chain responsibility, joint inspections and so forth. Social partners have played an active role in developing initiatives to tackle undeclared work both at national and EU level.
• Less emphasis is currently put on direct incentive measures that make it beneficial and easier to operate on a declared basis, and indirect policy measures that seek to encourage voluntary compliance using awareness campaigns and addressing the structural conditions that cause undeclared work in the construction sector.
Keywords: Informal Economy, Shadow Economy, Tax Evasion, Labor Economics, Informal Sector, Construction, European Union
JEL Classification: H26, J46, J48, K34, K42, O17, P37
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