Undeclared work; information on combating it

Undeclared work distorts competition, endangers the existence of small and medium-sized enterprises and destroys jobs. Public coffers suffer considerable losses in taxes and social security contributions.

Description

The term "undeclared work" is defined in Section 1 (2) and (4) of the German Act to Combat Clandestine Employment (SchwarzArbG).

As a rule, this is understood to mean the provision of services or work in

  • in violation of tax law,
  • in violation of social security law
  • by circumventing the obligation to notify the social security authorities, and/or
  • without registration of a trade or entry in the register of skilled crafts, although a trade or craft subject to licensing is exercised.

Undeclared work also occurs when the performance of a service or work is faked and social benefits are wrongly received as a result.

Illegal employment is defined separately in Section 1 (3) of the German Undeclared Employment Act (SchwarzArbG).

Undeclared work and illegal employment can have consequences under civil law, criminal law or public law (especially administrative law). Section 3 of the SchwarzArbG contains specific provisions on fines and penalties.

The Federal Customs Administration is responsible for combating undeclared work. It is supported by various agencies, including the district administrative authorities. These can, for example, initiate fine proceedings against undeclared workers and their clients or inspect companies where undeclared work is suspected in cooperation with the main customs office.

    Status: 17.01.2022

    Responsible for editing: Bayerisches Staatsministerium für Wirtschaft, Landesentwicklung und Energie

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