Law on illegal employment

More fairness on the labour market

The German government is taking a rigorous line on benefits fraud and illegal employment. A new law is to give customs officials greater powers, which will enable them to ensure more order and greater fairness on the labour market in future. This will protect honest workers in Germany.

Customs officials on a building site

Investigators are to be given more opportunities to tackle illegal employment

Photo: picture alliance/dpa

Undeclared work and illegal employment cheat Germany’s internal revenue services of significant tax revenue and social welfare contributions every year. To enable the authorities to address abuse and fraud more effectively, the German government has introduced a new act of parliament on illegal employment and benefits fraud. It provides for a further strengthening of the customs authorities, as agreed by the governing parties in their coalition agreement.

Customs authorities to step up recruitment

In all areas in which their work has hitherto come up against limits, the officials involved in the financial control of illegal employment are, in future, to be granted extensive powers of investigation. The customs authorities will be employing significantly more staff over the next few years.

The customs authorities will gain new powers in the following areas: 

  • Unlawful receipt of social welfare benefits, i.e. fictitious work or pseudo self-employment
  • The fight against the abuse of child benefits – in future the Familienkassen, the bodies responsible for paying child benefit, will receive more support
  • Establishing contacts for illegal employment at day labourer exchanges
  • Labour exploitation and concomitant trafficking in people
  • Offers of illegal work services (printed media and online platforms)
  • The fraudulent provision of accommodation in "junk real estate".

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