Labour MEPs voted today for the creation of a new European Platform to tackle undeclared work, which sets in place different tools to enhance cooperation in the prevention and deterrence of such work.
It will be composed of national enforcement authorities and will aim at enhancing cross-border cooperation on undeclared work through the development of common measurement tools; the development of a permanent training capacity; the introduction of a system of peer review; and the adoption of strategies and campaigns to raise awareness.
In the UK, there are an estimated 600,000 undeclared workers - two per cent of the workforce - with the shadow economy making up 10 per cent of UK GDP.
Siôn Simon MEP, member of the European Parliament employment and social affairs committee, said:
"Cash in hand work decreases tax and social security revenues and creates precarious and poor working conditions and unfair competition between workers.
"Many people desperately looking for a job are forced to sign contracts with payroll companies that class them as self-employed when in practice they only work for one company - this means that those people don't enjoy the same rights as other workers, can be fired without warning, do not receive holiday or sick pay, have reduced benefit entitlements and are also denied access to employment tribunals.
"With the freedom of movement across the EU, it is right that countries work with one another to tackle those employers who perpetrate undeclared, cash in hand work and hide behind borders.
"While I welcome this important initiative to tackle undeclared work, I would also like to urge the European Union to take action on the root causes of undeclared work. Higher levels of undeclared work are associated with a low GDP per capita, low social protection, higher poverty levels and greater inequalities.
"We urgently need EU action to be taken to improve the conditions of poor workers. The European Union has always been fighting for better working conditions and workers' rights and it now needs to act for vulnerable undeclared workers."