One-third of construction sector employs illegal foreign workers

Public authorities in charge of control efforts against the shadow economy are very concerned with illegal practices connected to foreign workers, said Finnish Tax Administration referring to a statistics on shadow economy published on Tuesday.

The units of Finland’s Regional State Administrative Agencies conducted some 1,600 control visits to business enterprises that employ foreign citizens last year.

On average, the Agencies found at least one non-Finnish employee for every 5 control visits who did not have the right to carry out the work they were doing in Finland.

The situation in the construction sector is even worse: whenever there were 3 checks carried out, the agency always found 1 construction company with foreign citizens that had not received the right to work in Finland.

“It is likely that the current circumstances in Ukraine will worsen the situation, so the number of illegal workers keeps on growing. The more we receive migrant workers in Finland, the higher the demands will be on Finnish public authorities, because we must control the foreign workers’ activity and make sure they have the legal right to work here, control the adequate legal wage levels, control the withholding of taxes and employers’ contributions,” said Janne Marttinen, Director of the Grey Economy Information Unit at the Tax Administration.

Finnish Regional Administrative Agencies have units in charge of occupational health and safety, which exercise control over foreign workers’ circumstances at places of work, including the existence of work permits and compliance with legal minimum wages and additional remuneration.

For foreign citizens who have not been given the right to work but who still have accepted employment in this country, there is an increased personal vulnerability and a risk that a malicious employer takes advantage of them.

“During our control activity we often encounter workplaces where the wages paid to foreign citizens – who do not have the right to work – are below the minimum level under Finnish law. On the other hand, we also run into circumstances where it is difficult to ascertain what the actual terms and conditions of the work are. For this reason, when we visit places of work, we increasingly turn to the foreign citizens themselves and start talking to them,” said Riku Rajamäki from the Regional Administrative Agency for Southern Finland.

It is the Tax Administration’s responsibility, in turn, to perform the necessary control action to safeguard the national revenue that consists of employers’ taxes.

Last year’s statistics on results from the exercised control indicate that the Tax Administration uncovered some 32 million euros of unreported payments of wages. However, a considerable part of the unreported employees are not identified during tax audits.