Employment MEPs vote on new measures to tackle problem

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The FINANCIAL — Undeclared work lead to countries missing out on taxes and social security contributions as well as to distortions in the labour market as it gives people who don’t declare their services and goods an unfair advantage.

Far from being a minor issue, undeclared work amounted to 18.4% of the EU’s GDP in 2012. On 7 May the employment committee votes on a proposal to launch a new European organisation to help member states work together on it, according to European Commission.

Why undeclared work is a problem

The European Commission defines undeclared work  as ”any paid activities that are lawful by nature, but not declared to the public authorities”. Bulgarian S&D member Georgi Pirinski, who is responsible for steering the Commission proposal through Parliament, said it was important to do something about undeclared work. “Not infrequently are [undeclared workers] exposed to precarious working conditions, including practices of severe exploitation,” he said. “[There are serious] consequences in the form of unfair competition unlawfully benefiting companies profiting from such types of work. And, not least, there are serious losses to public finances due to unpaid taxes and social security contributions.”

A European approach to countering undeclared work

Under the proposal a European Platform would be launched composed of national enforcement authorities – as nominated by the Commission and the member states-  as well as experts from various organisations and industries. The aim would be to facilitate cooperation between different countries.

Pirinski said the Platform would add value  “through expert discussion and exchange of best practices both in combatting and in regularising undeclared work”. He said it would focus on preventing and deterring undeclared work and encouraging its transformation into declared employment.

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