The gray economy is not only income that is not received by society. The gray economy distorts competition and causes properly functioning companies losses, for example in the form of missed contracts. At the individual level, it manifests itself as, for example, uncollected pensions, insecure employment and dependence on a fraudulent employer.
A cheap price can tempt professional subscribers and individual consumers to close their eyes to facts that could easily be seen in advance. Safety, quality and gray economy rarely occur on the same construction site. As A night bird the lyrics of the recent hit song go – you can order it – not so much, what hopes ordering and getting it at a suspiciously cheap price.
The construction industry RT has long been active in the fight against the gray economy by developing new tools to prevent economic crime on a voluntary basis and by presenting proposals for new regulations to legislators. A good example of this is, for example, the tax number of the construction industry and the monthly reporting obligation on the persons working on a joint construction site and the contract sums paid. These laws have come from the joint proposal and wish of the Construction Industry and the Construction Association.
The most recent example of the industry's desire to rein in the gray economy is the revised Foreigners' Act, where, based on our proposal, the construction industry, along with the shipyard industry, was legislated with a wider supervisory obligation than other industries in checking the work rights of foreigners working on construction sites.
European cooperation across borders
We see it as very important that we cooperate on an ongoing basis with labor market organizations in the construction industry as well as authorities, and not only among Finns. The gray economy does not follow the borders of countries, but often the same operating methods and negative phenomena are transferred from one country to another over a period of time.
A mobile workforce and long contract chains also expose the shadow economy to mild phenomena. That's why it's important to share information openly while learning from others' experiences. By sharing information about phenomena and our own experiences, we can better identify what industry operators and authorities should prepare for in the future and better. It is absolutely necessary that this valuable exchange of information is carried out regularly.
The construction industry has been active both in the cooperation of the Baltic Sea countries and at the level of the European Union in various projects that have commonalities with the gray economy and its fight. In addition to the regular meetings of FIEC, the European interest organization of construction contractors, social dialogues between employer and employee organizations on the European level are an effective way to share information and best practices on the above-mentioned issues. National practices to combat the gray economy vary, good practices can be used as a model for developing your own country's actions.
The Commission-funded Eurodetachment projects on the status of posted workers have been valuable projects to increase understanding. Similarly, the undeclared work forum maintained by the European Labor Authority (ELA) has enabled regular meetings between representatives of different countries after the corona crisis. The Valtti card, a pictorial identity card commonly used in the construction industry, and the legislation to combat the gray economy are of interest to our colleagues and the authorities of other countries at the EU level. We have had the opportunity with Rakennusliito to present solutions in use in Finland in connection with ELA's undeclared work forum and the various projects of its program.
The flow of information stumbles into old information systems
In a digitalized operating environment, official systems should better enable the sharing of information in electronic form, and not only between authorities. The free movement of information should also be realized on a practical level, because it enables the development and use of even more effective tools to combat the gray economy.
Unfortunately, the current obstacle to data transfer is old national information systems, not data protection legislation. That's why we hope that breaking down the barriers to information exchange would be taken seriously, so that the playing field for operators in the gray economy is made as difficult as possible. The authorities must have up-to-date powers and tools for information exchange, which supports this work.
The article is related to the "EU 17 fair construction" campaign of the European Labor Authority ELA launched on 10 October, the special theme of which is posted workers in the construction industry. The aim of the campaign is to inform employers and employees about their rights and obligations. In addition, the first ELA-assisted joint inspection will be organized, where the occupational health division of Southern Finland, together with the tax administration and the Pensions Agency, will inspect construction sites where workers have been sent from Estonia.
The article has also been published by the authorities fighting the gray economy Gray economy & financial crime on the website.
Ville Wartiovaara
Executive Vice President, Regional Director
ville.wartiovaara@rt.fi +358 40 564 7939Talonrakennusteollisuus ry, Uusimaa
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