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Combating the grey economy with the Prevention of Undeclared Work and Employment Act

At its regular session, the Government of the Republic of Slovenia approved the draft Prevention of Undeclared Work and Employment Act, which is among the priority government measures included in the project to reduce the grey economy and a commitment made in the 2013-2014 plan of development programmes. According to the Minister of Labour, Family and Social Affairs, Anja Kopač Mrak, eliminating undeclared work and employment is a major element in the fight against the grey economy and an important element of the social state.

The main goals of the act are greater competences of supervisory bodies on the field, providing the basis for more effective work of supervisory bodies; determining more clearly individual concepts, terminology and measures in the act, and imposing stricter sanctions on those who breach the law; to introduce administrative simplifications and eliminate red tape and consequently reduce the extent of undeclared work and employment.


Other goals of the proposed changes are to improve the existing situation in the area of preventing undeclared employment, and making the legal definitions clearer, thus preventing abuse.


The purpose of amendments to the concept of personal supplementary work (PSU) is to make this form of work widely applicable, alleviate the oversight of PSU, make it more difficult to avoid invoicing and, consequently, the avoidance of taxes, and by paying contributions on a PSU approach based on the concept of “every work counts”.


The most essential novelties introduced by the new act mostly refer to supervisory bodies, supervisory procedures and fines.

This includes a clearer definition of the ban on advertising undeclared employment or hiring workers illegally, including advertising jobs to individuals who already perform work based on contracts, simplified reporting of short-term work, clearer oversight procedures and competences of oversight bodies, higher fines, and the possibility to claim any profit/proceeds arising from undeclared employment, and introducing the sanction of excluding from public procurement employers that illegally employ third-country nationals. These employers are to be blacklisted (the list will be accessible to the public) together with other restricted employers.