Counteracting Undeclared Work and Labour Exploitation of Third- Country National Workers

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Counteracting Undeclared Work and Labour Exploitation of Third- Country National Workers Counteracting undeclared work and labour exploitation of third- country national workers Petra van Nierop, Lisa Schönenberg and Petar Terziev With contributions from Almina Besic, Karolina Jakubowska, Norma Rose, Ruslan Stefanov, Daniela Mineva January 2021 LEGAL NOTICE Neither the Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The information contained does not necessarily reflect the official position of the European Commission. This document is part of the work programme 2019-2020 of the European Platform tackling undeclared work established through Decision (EU) 2016/344. It does not necessarily reflect the position of the Platform. For any use of material which is not under the European Union copyright, permission must be sought directly from the copyright-holder(s) indicated. This publication has received financial support from the European Union Programme for Employment and Social Innovation "EaSI" (2014-2020). For further information please consult: http://ec.europa.eu/social/easi Table of contents EXECUTIVE SUMMARY ............................................................................................ 1 1 INTRODUCTION ............................................................................................... 6 1.1 Purpose of the report ................................................................................. 6 1.2 Method .................................................................................................... 8 2 AN OVERVIEW ON LEGAL MIGRATION AND IRREGULARLY STAYING THIRD-COUNTRY NATIONALS .......................................................................................................... 9 3 POLICY FRAMEWORK ADDRESSING UNDECLARED WORK AND LABOUR EXPLOITATION ..................................................................................................... 12 3.1 EU framework relevant in addressing undeclared work amongst third-country nationals ..........................................................................................................12 3.2 Policies affecting the situation of third-country workers .................................15 4 LABOUR EXPLOITATION AND DIFFERENT FORMS OF IRREGULARITY ..................... 17 4.1 Framing the understanding of labour exploitation in this report ......................17 4.2 Different ways of engaging in undeclared work amongst non-EU national and their relation to labour exploitation ......................................................................19 4.3 Profile 1: Regularly staying third-country nationals with fully flexible work authorisations ...................................................................................................22 4.4 Profile 2: Third-country nationals with a restricted work authorisation.............23 4.5 Profile 3 Irregularly residing third-country nationals and third-country nationals without a right to work .......................................................................................26 5 DIFFERENT PATHWAYS INTO UNDECLARED WORK AND LABOUR EXPLOITATION .... 28 5.1 Third-country nationals at greatest risk .......................................................28 5.2 Recruitment into undeclared work and labour exploitation differs between sectors .............................................................................................................33 5.3 Sectors with a high share of undeclared work and illegal employment .............34 6 COOPERATION OF ACTORS TACKLING UNDECLARED WORK AND LABOUR EXPLOITATION ..................................................................................................... 42 6.1 A central role of enforcement authorities in addressing undeclared work, illegal employment and labour exploitation.....................................................................42 6.2 A strong need for cooperation between public authorities to address undeclared work amongst third-country nationals ..................................................................43 6.3 Social partners and NGOs provide crucial links to migrants ............................46 7 COMMON MEASURES BY ENFORCEMENT AUTHORITIES, NGOS AND SOCIAL PARTNERS TO ADDRESS UNDECLARED WORK AND LABOUR EXPLOITATION ............... 48 7.1 Preventative measures targeted at third-country nationals and their employers ...50 7.2 Main measures of enforcement authorities to deter undeclared work by migrants .55 8 ROUTES OUT OF UNDECLARED WORK AND EXPLOITATION .................................. 63 8.1 Access to justice and repayment of wages ...................................................63 8.2 Granting protection for victims of labour exploitation ....................................64 8.3 Regularisation as a way to transfer undeclared work into declared work ..........65 9 CONCLUSIONS AND RECOMMENDATIONS .......................................................... 67 10 REFFERENCES ................................................................................................ 71 ANNEX 1: LIST OF CONSULTEES ............................................................................ 80 ANNEX 2: GLOSSARY ............................................................................................ 81 ANNEX 3: TOP THREE NATIONALITIES OF RESIDENCE PERMITS FOR REMUNERATED ACTIVITIES ......................................................................................................... 82 ANNEX 4: RESPONSIBLE AUTHORITIES FOR UNDECLARED WORK AND LABOUR EXPLOITATION OF THIRD-COUNTRY NATIONALS ...................................................... 83 ANNEX 5: LIST OF PROMISING PRACTICES PRESENTED IN THE REPORT ..................... 86 EXECUTIVE SUMMARY Undeclared work of third-country nationals is a serious concern for fair competition in host- countries, decent employment relations, but also social and fundamental rights of those workers. Although the relevant data are scarce, the recent 2019 Eurobarometer survey suggests that third-country nationals more often engage in undeclared work – and are consequently exposed to exploitative working conditions. This raises important issues for enforcement authorities who detect work irregularities on the ground and aim to ensure fair and decent work. The aim of this report is twofold. Firstly, it explores different ways of engaging in undeclared work by non-EU nationals, linking this to labour exploitation. Secondly, it focuses on labour, tax and/or social security authorities and social partners’ measures used to tackle undeclared work and labour exploitation of third-country nationals, ranging from prevention to detection and deterrence. To that effect, this report includes promising practices to address the complex issue of undeclared work of third-country nationals. Definitions of undeclared work, illegal employment and labour exploitation This report uses the working definition for undeclared work used by the European Commission: ‘any paid activities that are lawful as regards their nature but not declared to public authorities, taking into account differences in the regulatory system of Member States’. This activity-based definition excludes economic activities which are illegal or unpaid by their nature. Thus, undeclared work as defined above, includes: under- declared employment, unregistered employment, undeclared self-employment, labour infringements through the use of umbrella companies, and other specific informal practices which are not declared to labour, social security and tax authorities. Illegal employment is defined as an ‘economic activity carried out in violation of provisions set by legislation regulating the employment of third-country nationals (European Migration Network (EMN), 2018). In the EU context, this covers both the illegal employment of a third-country national who is irregularly staying on the territory of an EU Member State and of a legally resident third-country national working outside the conditions of the residence permit/visa and/or without a work authorisation. Thus, illegal employment of third-country nationals is either the result of irregular residency or the missing/restricted right to work. Labour exploitation lacks an official EU-wide legal definition and varies in degrees of severity, with most international definitions pointing towards its more severe forms, such as forced labour and slavery. In this report it is understood based on the definition by the European Union Agency for Fundamental Rights (FRA): ‘work situations that deviate significantly from standard working conditions as defined by legislation or other binding legal regulations, concerning in particular remuneration, working hours, leave entitlements, health and safety standards and decent treatment’ (FRA, 2015). Methodology Reliable estimates of the incidence of undeclared work among third-country nationals are scarce and the report is therefore based primarily on the following qualitative evidence: Desk research into the key evidence available at European, international and (selected) Member State level in relation to undeclared work, labour exploitation and illegal employment of third-country nationals. Targeted interviews of enforcement authorities and social partners in five EU Member States (Finland, France, the Netherlands, Poland, Sweden) and written contributions by enforcement authorities in four EU Member States (Belgium, Germany, Italy and Spain). 1 Targeted interviews with social partners, notably the European Trade Union Confederation (ETUC)
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