Labour Migration: Tackling Undeclared Work in Domestic Work

With approximately 3.1 million workers concerned, undeclared work is a widespread phenomenon in the sector.
In 2016, the European Commission estimated that Public Health Sector (PHS) was the third most commonly identified sector for
undeclared work, after the construction sector and hotels, restaurants and catering. The latest Eurobarometer
survey on the topic indicated that around 34% of all undeclared work undertaken in the EU in 2019 was
in PHS. Under-declared employment is also common in the sector but almost impossible to estimate, and the
high levels of undeclared work erode at Member States’ tax base. The European Platform tackling undeclared
work has made this a priority for 2022, specifically addressing reduced tax revenues.

There is a need for more effective monitoring and enforcement of labour rights in the sector, including
through more accessible complaints mechanisms and increased labour inspections. National-level campaigns
to promote compliance with applicable laws, for example, by informing people about their rights and
responsibilities as domestic workers and end-users respectively are needed. The relative cost and the complexity
of hiring a domestic employee or affordability of doing so in relation to a user’s income and need, affect
decision-making not only as to whether or not and how many hours of domestic work to purchase, but whether
to do so formally or informally. Therefore, Member States can either adopt a deterrence (based on measures to
improve detection and penalties) or a preventive approach (based on incentives that make declared work more
feasible, beneficial and easier than undeclared work).

There are many drivers of informality in the sector such as the scope and implementation of labour
and social security regulations, barriers for accessing legal and effective social security coverage, gaps and
restrictions in access to work permits as well as the variety of organizations and actors involved in mediating
and facilitating the supply of domestic workers and the demand for PHS. Direct employment model relationships
can encourage the use of undeclared employment and thus requires special attention. In this regard, measures
aiming at lowering the cost and easing workers’ declaration are key.

Furthermore, norms and values regarding family and home, and the gender division of labour in the
household, influence perceptions, attitudes and behavior regarding domestic work which suffers
from a low social prestige. In many EU countries, it is still culturally widely accepted to recourse to undeclared
work for specific services such as PHS and therefore no support is granted to the sector.
However, some countries have chosen to tackle undeclared work. To do so, an appropriate regulatory framework
is necessary. In addition, compliance barriers and the benefits to undeclared work should be addressed.

When it comes to PHS, most of the countries who chose to tackle the issue, have adopted a preventative
approach with the aim to make formal domestic services affordable to the greater number of users. While
some of these policies have been very successful, some have failed to strike the right balance between quality
of work and services’ affordability. Therefore, when designing such measures, governments should find long-term
and sustainable solutions for the benefit of workers (by granting them access to formal jobs not deviating
from standard employment rights and protection) and users (by enabling them to adequately meet their needs
on the formal market at an affordable price). Situations where people are registered as self-employed but
actually in employment must also be addressed. This type of employment exploits workers and transfers all the
responsibilities of employers on to workers.

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