Focus on illegal employment: New EMN study examines the period 2017–2022

Illegal employment is a complex issue affecting several areas, including migration, the labour market and labour exploitation (trafficking in human beings). Despite legislative changes and increased efforts in many of the EMN Member Countries, such as improved checks and sanctions, major challenges remain. In Sweden, active efforts have been in progress through inter-agency cooperation since 2017, aimed at combating work-related crime from a broader perspective.

Scope of the study

The study focuses on measures against illegal employment in EMN Member Countries among third-country nationals and beneficiaries of temporary protection in accordance with the Temporary Protection Directive. The study covers the period 2017–2022 and updates a previous EMN study from 2017. The comparative study is based on EU-wide legislation, in particular the EU Sanctions Directive.

Background

The period 2017–2022 was marked by unforeseen events such as the COVID-19 pandemic and Russia’s full-scale invasion of Ukraine. Platform work (the “platform” or “gig” economy) grew at this time, presenting new legal and labour market challenges. The study shows that beneficiaries of temporary protection are at increased risk of ending up in jobs outside the regular labour market.

Efforts to combat illegal employment among third-country nationals were primarily directed at sectors with low-skilled labour, such as construction, car repair shops, agriculture and forestry, the cleaning sector and the beauty industry. Small and medium-sized enterprises were most common, except in Cyprus and Finland, where illegal employment occurred in companies of all sizes.

To combat work-related crime, the European Commission began reviewing the regulatory framework as early as in 2006. Illegal employment among third-country nationals remains a high-priority policy issue and significant legislative changes have been made in several areas. Despite progress and increased inspections, the impact of these measures appears to be limited.

European perspective

In many EMN Member Countries, illegal employment among third-country nationals has been discussed alongside broader migration issues. The issue is broader, however, and extends across other sectors. To tackle the problem, ten EMN Member Countries have implemented legislative and policy changes since 2017, while others have introduced various types of measures. These measures include increased inspections, multilingual information campaigns, helplines and enhanced inter-agency cooperation, both nationally and at the European level, in collaboration with the European Labour Authority (ELA).

• Finland – In Finland, illegal employment has been much discussed since 2023, with several legislative changes having been implemented to combat it. Fines and penalties have been introduced in, for example, the Aliens Act and the Criminal Procedure Act, and the responsibilities of employers and contractors have been tightened. The measures came into force between 2021 and 2023. Finland also cooperates closely with the Nordic and Baltic countries within the Council of the Baltic Sea States.
• Belgium, Bulgaria, Cyprus, Greece, Luxembourg and Sweden report a sharp increase in unannounced workplace inspections at companies.
• Eleven EMN Member Countries, including Sweden, Bulgaria, Estonia, Italy, Poland and the Netherlands reported that increased financial penalties had been introduced.
• France, Belgium, Cyprus and Ireland have presented their work on introducing prison sentences for serious offences relating to illegal employment. France, together with Estonia, Lithuania, Hungary and Slovenia, has excluded employers who hire workers illegally from public procurement.
• Austria, Belgium, Ireland and Luxembourg pay particular attention to third-country nationals residing in the country to study. Checks focused primarily on ensuring that students did not work more than was permitted under Article 24(3) of the Students and Researchers Directive (2016/801/EU).

Introducing sanctions: Challenges and good practices

EMN Member Countries highlight time constraints and administrative workload as major challenges. According to France, digitalisation and the gig economy have created new forms of employment that are more difficult to track. Other challenges include a lack of testimony from workers, coordination problems between authorities, difficulties in proving illegal employment and enforcing sanctions, as well as language barriers and workers’ fears of possible consequences for reporting employers. This can affect individuals in various ways, for example leading to loss of income and, in some cases, to difficulties in obtaining or retaining their residence permit in the country.

Good examples include increased fines, tougher sanctions, information campaigns, inter-agency cooperation, the use of IT solutions and collaboration with academia. Although EMN Member Countries have mechanisms in place for third-country nationals to lodge complaints, the design of these mechanisms may vary.

Situation in Sweden: Strengthened inter-agency cooperation

The inter-agency cooperation the Delegation Against Work-related Crime was established in Sweden in 2017 as part of a strengthened inter-agency collaboration to combat work-related crime. As part of these efforts, increased workplace inspections have been conducted, with e-services and information campaigns having been launched to raise awareness of working conditions and risks within certain sectors. However, ongoing work is hampered by challenges relating to data sharing and confidentiality.