Federal authorities zero in on emerging hubs of unreported employment
The German federal government has approved a bill aimed at combating the black economy, with a focus on new hotspots in the hairdressing and cosmetics industry.
The draft bill, which is a significant milestone in the fight against illegal employment, is expected to generate significant additional revenue. Over 1.26 billion euros is expected in the next year, and over 2 billion euros by 2029.
Employers will face an immediate reporting obligation for new employment relationships upon the bill's entry into force. This will help in the swift detection and investigation of potential cases of social welfare fraud and black work, which are considered "not a minor offense."
The bill expands the powers of the customs unit Financial Control Black Economy (FKS). The FKS will be able to pursue cases "from start to finish," and will focus on barbershops, cosmetics, and especially nail salons as new hotspots of black economy and illegal employment.
The forestry industry is no longer considered a high-risk sector for black economy, while the butcher's trade has been separated from the meat industry and removed from the list of sectors targeted by the bill. This move has been supported by the Central Association of the German Trade (ZDH).
However, the opposition is not thrilled with the bill, and Left leader Ines Schwerdtner has criticized it. She stated that profiteers of black economy are not the employees but the employers who underpay wages and evade social security contributions.
Federal Minister of Labor, Bärbel Bas, is pleased that data for the customs office's findings and investigations can be quickly passed on to job centers. The customs unit will participate in the police information network, reducing the need for police assistance.
The bill strengthens the role of the FKS as a "minor public prosecutor." This means that the FKS will have more power to investigate and prosecute cases of black economy.
Employees in these sectors will be required to carry their IDs, which will aid in the identification of illegal workers and employers.
While details regarding the specific provisions of the bill affecting the hairdressing and cosmetics industry are not yet widely reported, this article provides an overview of the bill's main objectives and expected impacts. Further updates on the bill's progress and its implementation in the hairdressing and cosmetics sector will be shared as they become available.
The bill's focus on the hairdressing and cosmetics industry could pave the way for enhanced community policies, potentially including vocational training programs, to combat illegal employment and encourage compliance with business practices, contributing to the general-news discussed. The bill's approval further emphasizes the connection between politics and finance, as the anticipated revenue from combating the black economy could potentially be allocated towards various national priorities.
