The Cyprus government is taking bold steps to crack down on undeclared employment, with plans for extra-judicial fines, increased inspections, and improved coordination between departments. Labor Minister Yiannis Panayiotou emphasizes the need for these measures, highlighting the significant loss of social insurance fund revenues due to informal work. With legislative changes on the horizon, the government is determined to combat the negative effects of illegal employment and ensure compliance with labor laws.
What measures is the Cyprus government taking to combat undeclared employment?
- Introducing a system of extra-judicial fines with penalties doubling for repeat offenders.
- Increasing labor law enforcement through more frequent inspections, particularly on construction sites.
- Improving coordination between labor and immigration departments via integrated IT systems.
- Launching outreach efforts to educate third-country nationals on legal employment.
- Investigating links between illegal employment and criminal activities.
- Preparing for legislative changes, including a digital census of all workers.
Clampdown on the Informal Economy
The government of Cyprus is intensifying its efforts to curb the prevalent issue of undeclared work within the nation. It’s estimated that a staggering 40,000 individuals, comprising approximately eight percent of the workforce, are engaged in informal employment. This has significant repercussions, not least of which is an annual loss of around €10 million in social insurance fund revenues. Labour Minister Yiannis Panayiotou highlighted these figures, emphasizing the seriousness of the situation following a recent cabinet meeting.
The Strategy for Reduction includes implementing a new system of extra-judicial fines to replace the existing administrative penalties. Employers caught with undeclared workers will face a fine of €1,000, which is a twofold increase from the previous amount. If an employer is a repeat offender, the fine will double. By enforcing stricter fines, the government aims to send a clear message that informal employment will not be tolerated.
Inspection and Legislation
To strengthen the enforcement of labor laws, the government plans to ramp up inspections, particularly targeting construction sites and other businesses. These inspections are critical, as recent checks of 7,935 workers revealed that 1,038 were illegally employed. This indicates a worrying upward trend in the occurrence of undeclared work, underscoring the need for more aggressive action.
Further to increasing inspections, there will be a concerted effort to improve coordination between the labor department and the migration and civil registry department. The integration of IT systems and databases will be a significant step towards more effective use of data in combating illegal employment. Additionally, there are plans to enhance staffing levels to support these initiatives.
Outreach and Enforcement
The Cypriot government is not only focusing on punitive measures but is also looking to engage in outreach. A campaign is set to target third-country nationals between the ages of 17 and 65 who are legally residing in Cyprus but are not registered as legal workers. This proactive approach will help to educate and encourage compliance with employment regulations.
An intriguing aspect of the crackdown is the investigation into the potential links between employers of undeclared workers and people-smugglers. This indicates a broader concern that informal employment may be tied to more serious criminal activities, which the government is keen to unravel and address.
Future Developments
Looking ahead, the government is preparing for necessary legislative changes. Among the proposed legislation is a digital census of all employees to monitor employment status, remuneration, and social insurance contributions. Moreover, the liability of main contractors and subcontractors in cases of undeclared work will be clarified.
The minister expressed determination to tackle the multifaceted negative impacts of undeclared and illegal work on the public interest. With these measures set to feature in the next Labour Advisory Council meeting, there is a strong anticipation of comprehensive and beneficial outcomes from a collaborative effort with social partners.
What measures is the Cyprus government taking to combat undeclared employment?
The Cyprus government is implementing a system of extra-judicial fines, increasing labor law enforcement through more frequent inspections, improving coordination between departments via integrated IT systems, launching outreach efforts to educate third-country nationals, investigating links between illegal employment and criminal activities, and preparing for legislative changes including a digital census of all workers.
How will the new system of extra-judicial fines work to combat undeclared employment?
Under the new system, employers caught with undeclared workers will face a fine of €1,000, which is a twofold increase from the previous amount. Repeat offenders will face doubled penalties. These stricter fines are intended to send a clear message that informal employment will not be tolerated.
What are the key areas of focus for increased inspections in combating undeclared employment in Cyprus?
The government plans to target construction sites and other businesses for more frequent inspections to strengthen the enforcement of labor laws. Recent checks revealed a significant number of illegally employed workers, indicating a need for more aggressive action to combat undeclared work.
What are the future legislative changes being considered to address undeclared employment in Cyprus?
Proposed legislative changes include a digital census of all employees to monitor employment status, remuneration, and social insurance contributions. Additionally, there will be clarification on the liability of main contractors and subcontractors in cases of undeclared work. These changes aim to enhance compliance with labor laws and reduce the prevalence of undeclared employment in Cyprus.
