Undeclared Work

Undeclared Work

Features and Policy MeasuresEuropean Commission Survey (2019)European Platform Tackling Undeclared Work

Features and Policy Measures


Addressing undeclared work is a complex and difficult challenge, especially when a country faces a difficult socioeconomic situation marked by high unemployment, a poor business environment and the lack of fiscal space.

In Greece, like many other European countries, undeclared work remains a significant feature of the economy, despite measures taken in recent years to address the issue, including imposing stricter sanctions, reducing non-wage costs and reducing bureaucratic obligations and the administrative burden.


Undeclared work refers to work entirely undeclared to the state for taxation, social insurance and/or labour law purposes. This includes unregistered employees without a contract who work for a business, for a household, as family members, private tutors, or as farm workers.

They may be Greek citizens, legal immigrants or immigrants with an irregular status. These workers might be secondary or multiple job holders who have social security coverage in their main job but do not contribute in their second job, or they may be pensioners, students, or others not in additional forms of declared employment.

Besides undeclared wage work, there is also undeclared own-account work conducted on a self-employed basis where all or some of their transactions are not declared. Many of these self-employed in Greece may well be ‘bogus self-employed’.

Underdeclared work, meanwhile, here refers to the illegal employer practice of salary under-reporting, including the practice of declared employers paying declared employees two salaries: (a) an official salary declared for tax, social security and labour law purposes, and (b) an additional undeclared remuneration received ‘under the table’ or by ‘envelope’.

Another variant of underdeclared work in Greece is where businesses employ a person on, say, a 4-hour contract, but they work for 7-8 hours.

Extent and Nature of the undeclared economy in Greece

The size of the undeclared economy is commonly estimated to be equivalent to some 25% of GDP in Greece. A catalyst for its prevalence is the relatively high level of self-employment and large share of micro- and small enterprises.

More specifically, micro enterprises with 1-9 employees represent 96% of all enterprises in Greece, employing 55% of the labour force (compared with less than 30% in the EU-28).

Greece also has the highest percentage of self-employed people in the EU28 at a rate of more than 32% (14% in the EU-28).

According to the 2013 Eurobarometer survey, of all undeclared work in Greece, 67.3% was waged employment (with 13.3% wholly undeclared waged employment and 54% under-declared employment), 10.2% was undeclared self-employment and 22.5% was paid favours for close social relations.

Moving towards the declared economy

It is now widely accepted across the developed, transition and developing world, that the aim of governments is not to eradicate the undeclared economy, but to move undeclared work into the declared economy.

For governments, the benefits of moving undeclared work into the declared economy are that it improves the level of public revenue, thus enabling governments to pursue higher expenditure on social integration and mobility projects.

For formal sector enterprises complying to the regulatory framework, it prevents unfair competition and enables the business community to better comply to the legal and regulatory framework, to create formal jobs and to be the engine of inclusive growth.

For undeclared workers meanwhile, the key benefits are that they can achieve the same levels of legal protection and working conditions as declared workers.

For customers, furthermore, the advantages of legitimising the undeclared economy are that such customers benefit from legal recourse if a poor job is done, have access to insurance cover, enjoy guarantees with regard to the work conducted, and have more certainty that health and safety regulations are being followed.

The Greek Labour Inspectorate in the fight against Undeclared Work

The Greek government has shown a strong commitment to tackle undeclared work by placing it as a priority at all inspectoral agencies and institutions.

The Greek Labour Inspectorate, as the enforcement authority of the Ministry of Labour and Social Affairs, takes overarching responsibility for labour law violations, and given that tackling undeclared work in Greece is primarily perceived as concerned with the social protection of workers, this agency is viewed as the lead agency in tackling undeclared work, taking responsibility for the implementation of deterrence policies, information and awareness campaigns and pilot programs for targeted and joint inspections with other inspectoral agencies.

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