Grey economy, economic crime in for lean days

The government has approved extensive measures to tackle the grey economy and economic crime, said a government press release on Tuesday.

Undeclared work is a growing phenomenon in Finland, as evidenced by increasingly frequent contacts with occupational safety and health authorities and the observations made by the authorities during workplace inspections.

In times of crises, there is a higher risk of undeclared work and abuse. The best way to combat undeclared work is to encourage cooperation between various actors, and to share information.

In its most serious forms, undeclared work may involve gross underpayment, extortion, work discrimination, or trafficking in human beings. An employer using undeclared labour may simultaneously commit several different offences related to taxation, social insurance, occupational health and safety, and labour law.

“In addition to having a negative economic impact on society, the shadow economy may, at its worst, involve serious employee mistreatment. We must take determined action in multiple sectors to eradicate this phenomenon, including measures to improve occupational safety and health supervision,” said Minister of Social Affairs and Health Aino-Kaisa Pekonen.

“The government has expanded its range of actions to combat the shadow economy. Among other things, we are taking stringent measures to tackle the exploitation of foreign labour. We must be able to ensure a fair labour market for all,” said Minister of Employment Tuula Haatainen.

In June 2020, the government adopted a new strategy and action plan for tackling the grey economy and economic crime. The government is investing approximately EUR 15 million to enhance these actions during this parliamentary term. Actions to tackle the grey economy will focus on prevention, more effective access to information and cooperation between authorities.

Crises affecting the economy and employment, such as the coronavirus epidemic, may result in an increase in undeclared work. Companies’ weakening operating conditions and employment situation may lead to unfair competition and employee mistreatment with regards to terms of employment and pay.

During the coronavirus crisis, special attention has been paid to the status of seasonal workers and safe working and living conditions.