The EU defines undeclared work as "any paid activities that are lawful as regards their nature but not declared to public authorities". The fact that undeclared work is not registered in an EU-wide scheme and defined differently in different European countries makes it difficult to know how widespread it is across Europe. According to findings by the World Bank, countries in Southern Europe are estimated to have the highest levels of undeclared work, ranging from 18.8% in Spain to 53% in Cyprus. Although the challenges are common for Member States and undeclared work often has a cross-border dimension, there is still no formal mechanism in place for all relevant authorities from Member States to address these cross-border aspects of undeclared work.
Because you pay the bill. Undeclared work has serious financial implications resulting in lower tax and social security revenues. That means, the higher the level of undeclared work, the more taxes everyone has to pay. Furthermore, it has negative impacts on employment, productivity and working conditions, skills development and life-long learning. It results in lower pension rights and less access to health care.
An impact assessment the European Commission concluded that the establishment of a European Platform with mandatory membership - composed of national authorities - would be the best option to strengthen EU cooperation in the prevention of undeclared work. Then EU Commissioner László Andor, responsible for Employment, came up with a legislative proposal.
The platform will exchange best practice examples and information, develop know-how and coordinate cross-border actions. Therefore, a 'knowledge bank' of different practices and measures will be established as well as non-binding guidelines for inspectors, handbooks of good practice and common principles of inspections.
The European Parliament stated that the main aim of this Directive is to encourage cooperation at Union level between Member States and to successfully tackle the complex problem of undeclared work. Yet, the new platform does not impede the competence of Member States to decide on the measures to take at national level to tackle undeclared work.
The regulation was discussed and voted on in the Committee on Employment and Social Affairs; the report was presented in May 2015. Then, the so-called Trilogue negotiations with Parliament, Member States and European Commission started. The negotiators reached an agreement in November 2015 which was formally adopted by the Parliament in February and offically published in March 2016. The platform was finally launched on 27 May 2016.
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