The Ministry of Labour aims to equip itself with new tools to tackle undeclared work, as there has been an increasing trend in this phenomenon lately.
Undeclared work, as known, leads to a series of side effects and problems, such as loss of revenue for the Social Security Fund, unfair competition among businesses, and exploitation of workers, mainly foreigners, who are willing to work cheaper and undeclared.
In this context, the Cabinet approved a series of actions last Wednesday, which will be immediately implemented. These actions include increasing inspections at workplaces and planning discussions for further legislative regulations.
For instance, there will be an increase in fines for undeclared work from €500 to €1000, which will also be pursued extrajudicially, meaning they will be delivered automatically and on the spot without further bureaucracy, similar to fines issued by the Police.
The measures decided by the Cabinet were presented yesterday by the Minister of Labour, Yiannis Panagiotou, in a press conference. He expressed his concern about the increased trend observed in recent inspections for undeclared and illegal work.
According to Panagiotou, undeclared and illegal work negatively affects fair economic competition, smooth labor relations, the sustainability of the pension system, and the handling of illegal migration flows.
He mentioned that through targeted inspections conducted by the Ministry of Labour in collaboration with the Ministry of Interior and the Police, there has been a surge in these violations in specific sectors of economic activity.
“In particular, out of 2889 inspections conducted in recent months at construction sites and businesses, 7937 employees were checked, and violations of undeclared and illegal work were found in 1038 cases, accounting for 13%,” said the minister, justifying the recent decisions taken.
Immediate measures that will be implemented include increasing inspections and targeting specific areas and schedules, integrating available IT systems and databases for data utilization, conducting outreach campaigns targeting third-country nationals aged 17-65 legally residing in Cyprus but not identified as legal workers, and investigating the connection between employers practicing undeclared and illegal employment of foreigners and human traffickers.
According to Yiannis Panagiotou, the Cabinet also decided on measures for which relevant bills will be submitted to make necessary legislative changes, following consultation with social partners. These include:
- Electronic registration of all employees in the Ministry of Labour’s information system.
- Imposing an extrajudicial fine of €1000 for each case of undeclared work (currently there is an administrative fine of €500, which requires a violation notice and defense procedures before issuance).
- Holding the main contractor responsible in addition to the subcontractor for cases of undeclared work.
- Doubling the extrajudicial fine in the event of repeated violation with a new case of undeclared work.
All the above, as hinted by the Minister of Labour yesterday, will be discussed in the next Labor Advisory Body meeting, with the aim, as we are informed, for this to happen immediately after the Easter holidays.
