Undeclared Work

In order to avoid falling foul of an illegal employment relationship, you should follow certain rules.

The fight against undeclared income and abuse of the system

Check for undeclared workers on a construction site, two inspectors approach a construction worker (back view). The builder shows his ID.

No undeclared income. Then everyone wins.

Undeclared work does not just harm the economy, it poses a personal risk, because:

  • If you do not pay your social security contributions, you are not insured.
  • Employers who support illicit work are liable to prosecution.
  • People engaged in undeclared work have no wage guarantee and no job security.

The federal law on measures to combat undeclared work (BGSA), which entered into force on the 1st of January 2008, introduces a number of new ways to combat undeclared work:

  • A simplified accounting process for social security contributions and taxes (e.g. for domestic cleaners or part-time employees in small enterprises).
  • The obligation of the cantons to set up a supervisory body. Thus strengthening the powers of control and improving coordination among the relevant authorities.
  • The authorities are obliged to exchange data.
  • Increased penalties such as exclusion from public procurement and public financ

Simplified accounting process

Those who employ people with a small income or in private homes, often shy away from the supposed “bureaucratic nightmare” . Since the 1st of January 2008, there is a simplified payroll process for just these types of cases that facilitates the procedure for social security contributions and taxes through the AHV compensation fund.

Checks

In the Canton of Basel-Stadt, the Arbitration Board in the Office for Economy and Labour is the controlling body for the canton. It is the one-stop-shop for all notifications, information and questions about undeclared work. Secondly, the controlling body also carries out its own checks on undeclared work, either because of evidence from a member of the public or because it has received reports from other authorities. The object of these checks is the compliance with the notification and authorisation obligations according to the law governing social security contributions, foreign nationals and the withholding of tax.

In accordance with the BGSA, the authorities also have the duty to inform foreign nationals about their rights against their employer in the event of expulsion and deportation proceedings.

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