1. Undeclared work Data based on inspections of the Corps of Labour Inspectors (SEPE) and Social Insurance Foundation (IKA) Antigoni Giannourakou Corps of Labour Inspectors Department of Legal Support Tel: +30210 3748743 Fax: +30210 3748744 E-mail: agiannourakou@ypakp.gr agiannourakou@ypakp.gr Athens May 2010

2. Definitions EC: productive activities that are lawful as regards to their nature but are not declared to the public authorities, taking into account the differences in the regulatory systems between Member States (Undeclared work in an enlarged union, May 2004) ILO: all economic activities by workers and economic units that are, in law or in practice, not covered, or insufficiently covered, by formal arrangements (Labour Inspection in Europe: undeclared work, migration, trafficking)

3. Introduction 1998: Communication of the European Commission on undeclared work designed to launch a debate on the causes of such work and the policy options for combating it 1998: Communication of the European Commission on undeclared work designed to launch a debate on the causes of such work and the policy options for combating it Since 2001, the issue of undeclared work has been included in the EU employment guidelines Since 2001, the issue of undeclared work has been included in the EU employment guidelines 2003: Resolution of the Council of the European Union on undeclared work, calling on Member States to address this issue and to work together to improve the situation 2003: Resolution of the Council of the European Union on undeclared work, calling on Member States to address this issue and to work together to improve the situation 2008: Resolution of the European Parliament “Stepping up the fight against undeclared work” 2008: Resolution of the European Parliament “Stepping up the fight against undeclared work”

5. Undeclared Work in the European Union (2007)

6. The situation in Europe the undeclared workforce is mostly male ( the undeclared workforce is mostly male (Italy is the only country where more women than men are engaged in undeclared work) undeclared workers are more likely to be young with almost two-thirds under the age of 40 the proportion of non-nationals to national residents in undeclared jobs is about the same → → illegal immigrants were probably under-represented in the survey due to language barriers and sampling reasons the two most over-represented categories of undeclared workers are the unemployed and self-employed

7. Reasons To avoid payment of income, value added or other taxes To avoid payment of social security contributions To avoid certain legal standards such as minimum wages, maximum hours, safety or health standards, etc To avoid certain administrative procedures eg completing statistical questionnaires or other administrative forms The main motivation for employers, employees and self- employed people to participate in the undeclared economy is economic

8. Solutions???? the general objective should always be to discourage undeclared work the general objective should always be to discourage undeclared work strategies which combine several elements: a well coordinated approach among administrative authorities at a national and international level and a combination of awareness raising, prevention and sanctions as well as the involvement of social partners and judiciary authorities strategies which combine several elements: a well coordinated approach among administrative authorities at a national and international level and a combination of awareness raising, prevention and sanctions as well as the involvement of social partners and judiciary authorities Sanctions: Sanctions:  properly designed  applied in a proportionate manner  dissuasive  well balanced

9. The case of Greece basic aspect of the parallel economy: undeclared work basic aspect of the parallel economy: undeclared work the proportion of the economy that is 'hidden' represents around 25%-40% of the official Gross Domestic Product the proportion of the economy that is 'hidden' represents around 25%-40% of the official Gross Domestic Product undeclared or partially registered work is widespread in the Greek labour market undeclared or partially registered work is widespread in the Greek labour market  research by the Panhellenic Federation of Social Policy Organisation Staff (POPOKP) estimates the level of social security contribution evasion at the equivalent of 15%-20% of the total income of most social insurance funds and 30% in the case of the Social Insurance Foundation (IKA)

10. Factors that foster and reinforce the phenomenon of undeclared work levels of social security contributions that employees and employers must pay levels of social security contributions that employees and employers must pay tax rates in force tax rates in force the unemployment rate the unemployment rate the extent of self-employment and use of family members the extent of self-employment and use of family members migrant flows into the Greek labour market migrant flows into the Greek labour market the evolution of real pay the evolution of real pay these factors, in conjunction with other structural factors eg inadequate frequency and extent of controls of the observance of labour and social security legislation, appear to create the necessary incentives and opportunities for the development of undeclared work these factors, in conjunction with other structural factors eg inadequate frequency and extent of controls of the observance of labour and social security legislation, appear to create the necessary incentives and opportunities for the development of undeclared work

11. Corps of Labour Inspectors (SEPE) it came into operation in 1999 it came into operation in 1999 it reports to the Minister of Labour and Social Security it reports to the Minister of Labour and Social Security three types of Labour Inspectors: Social, Technical and Sanitary three types of Labour Inspectors: Social, Technical and Sanitary inspectional mechanism whose main task is to monitor the implementation of labour legislation in respect of terms and conditions of employment (eg working time limits and pay), the legality of employment, workers' health and safety conditions inspectional mechanism whose main task is to monitor the implementation of labour legislation in respect of terms and conditions of employment (eg working time limits and pay), the legality of employment, workers' health and safety conditions SEPE investigates the workers' social insurance coverage - it does not impose the relevant sanctions SEPE investigates the workers' social insurance coverage - it does not impose the relevant sanctions

12. Competencies In order to function effectively and achieve the desired results Labour Inspectors In order to function effectively and achieve the desired results Labour Inspectors  freely enter all workplaces in the private and public sector, at any time during day or night, even without prior notification  carry out necessary examinations, monitoring or investigations of all types, with a view to determining whether the provisions of labour legislation are being observed  temporarily suspend operation of the whole or part of an enterprise, if the SEPE deems that workers' safety and health are directly at risk  impose administrative penalties  have access to archives, documents, registers, books and other data concerning an enterprise  investigate the causes of fatal and serious industrial accidents and draw up accident reports  and  take action to reconcile any individual or collective labour disputes which may arise

13. COMPARATIVE RESULTS CONCERNING THE FIRST QUARTER OF YEARS 2010 - 2009 - 2008 (SEPE) YEAR Α' QUARTER 2010 Α' QUARTER 2009 Α' QUARTER 2008 DEVIATI ON Α' QUARTE R 2010 - 2009 DEVIATI ONΑ' QUART ER 2010 - 2008 DEVIATI ON Α' QUART ER 2009 - 2008 DEVIATIO N Α' QUARTE R 2010 - 2009 % DEVIATIO N Α' QUARTE R 2010 - 2008 % DEVIATIO N Α' QUARTER 2009 - 2008 % INSPECTIONS9.1247.6328.4411.492683-80916,357,49-8,87 CHARGES525473348521771259,9033,7123,81 REPORTS (TO PUBLIC PROSECUTOR) 575914371-339204543-58,9635,4894,43 PENALTIES1.4981.0241.220474278-19631,6418,56-13,08 AMOUNTS OF PENALTIES 2.891.0091.844.1002.394.5001.046.9 09 496.509- 550.400 36,2117,17-19,04 RECONCILIATION5.5055.0493.9334561.5721.1168,2828,5620,27 SOLVED2.5122.3781.8881346244905,3324,8419,51 PAID AMOUNTS 4.935.2574.037.0652.633.939898.1922.301.3 18 1.403.1 26 18,2046,6328,43 LABOUR INSPECTORS 374392439-18-83-47-4,81-22,19-11,99

14. INSPECTIONS OF CONTROL SERVICES OF IKA IN REGISTERED AND NON-REGISTERED BUSINESSES DURING MARCH 2010 WITH SEPE REGION OF CONTROL INSPECTED BUSINESSES IN GENERAL REGISTEREDNON-REGISTERED AMOUNTS INSPECTED BUSINESSES REGISTERED (INSURED) EMPLOYEES NON- REGISTERED (INSURED) EMPLOYEES INSPECTED BUSINESSES NON- REGISTERED (INSURED) EMPLOYEES PENALTIES FORGRFORGRFORGR ATTICA5755504061.071246308252119305357.500 SALONICA1551381219079174231613.500 CRETE23219720308420353391612.000 THESSALIA9790919184871122633.000 IOANNINA1631542120444892162828.500 TOTAL1.2221.1294681.9642694339331109391444.500

15. INSPECTIONS OF CONTROL SERVICES OF IKA IN REGISTERED AND NON-REGISTERED BUSINESSES DURING MARCH 2010 WITHOUT SEPE REGION OUTOF CONTROL INSPECTED BUSINESSES IN GENERAL REGISTEREDNON-REGISTERED AMOUNTS INSPECTED BUSINESSES REGISTERED (INSURED) EMPLOYEES NON- REGISTERED (INSURED) EMPLOYEES INSPECTED BUSINESSES NON- REGISTERED (INSURED) EMPLOYEES PENALTIES FORGRFORGRFORGR ATTICA8538293751.331190398242312368356.500 SALONICA379329545242293507718682.000 CRETE624374565921950250402375134.500 THESSALIA95871989934845 26.500 IOANNINA147135262051761123114238.500 TOTAL3.3201.7645302.74126763634477336681538.000

16. Bibliography Labour Inspection in Europe: undeclared work, migration, trafficking, ILO, January 2010, Geneva Undeclared Work in the European Union, European Commission-Special Eurobarometer, October 2007 Undeclared work in an enlarged union, European Commission, Directorate-General for Employment and Social Affairs, May 2004 Thematic feature-industrial relations and undeclared work, INE-GSEE, 2004 New Labour Inspectorate launched, Federation of Greek Industries, 2001