The European Parliament adopted an own-initiative report on a European Commission proposal to step up efforts to combat undeclared work. MEPs call on the Commission to consider establishing a database on the various approaches and methodologies used to measure undeclared work in the Member States so as to promote the sharing of good practice and knowledge transfer in this area.

The report was adopted with 479 votes in favour, 50 against and 40 abstentions.

Undeclared work, which in some Member States accounts of 20% of GDP, is a worrying feature of Europe's labour markets, say MEPs.

Undeclared work risks undermining the European social model and distorting competition on the single market. It also leads to social dumping, notes the report. Furthermore, immigrants, particularly illegal ones, are more exposed to the risks of undeclared work.

MEPs ask that Europe's efforts to combat undeclared work be more pro-active and incisive, so as to ensure that the modernisation of labour law in the Union is not confined to the purely theoretical level but is translated into effective, high-quality policies, and to ensure that improved job quality can be achieved in every case in accordance with the 'decent work' objective.

Better European co-ordination

MEPs call for the EU to play a greater role in promoting co-operation and co-ordination among labour inspectorates, by strengthening the economic and technological resources of inspection services.

Undeclared work has various definitions in the national legal systems, and a definition common to all Member States would ultimately eliminate statistical uncertainties. The Commission's proposed distinction between legal and illegal activities can be used as a starting point, say MEPs.

Encourage the formal economy

The House asks Member States to consider improving incentives to declare work and to impose tough sanctions on employers whom, despite benefiting from incentive measures, continue to employ undeclared workers.

MEPs also call for better enforcement of existing minimum wage legislation in each Member State and urge those Member States that do not currently have a decent minimum wage to consider developing one, in negotiation with the social partners and in accordance with national practices.

Free movement of workers in the EU

Finally, Member States that have applied transitional arrangements to the free movement of workers in the EU are asked to open up their labour markets to workers from all the new Member States, given that restrictions not only run counter to the EU's founding principles, but increase recourse to undeclared work and could create territorial imbalances, stresses the report.