Proposal to Expand the Count of Commission Members Presented
Germany Strengthens Fight Against Illegal Employment with Comprehensive Reform
Finance Minister Lars Klingbeil has announced a comprehensive reform aimed at strengthening Germany's fight against black work and illegal employment. The reform, set to be presented to the cabinet on Wednesday, focuses on modernizing and digitizing the Financial Control of Illicit Employment (FKS) [1][2].
The modernized FKS will transform into a more effective and technologically advanced agency. Enhanced digital networking and improved data-sharing among government agencies will enable the FKS to independently investigate fraud cases, thereby reducing the burden on the judicial system [1].
The reform extends its focus to sectors with rising illegal employment and associated criminal activities. In addition to the construction and hospitality industries already under stringent regulation, the law explicitly targets sectors such as barbershops, beauty salons, and nail studios [1][3].
The FKS will also be granted stronger enforcement authority. This will empower the agency to tackle serious economic crimes and connections to organized crime syndicates more robustly. The FKS will be able to act independently on matters of fraud and better coordinate cross-agency efforts against illegal labor and money laundering [1][3].
Employees in these sectors will be required to carry identification at all times to facilitate verification and enforcement, similar to existing requirements in other high-risk industries [1]. Employers will also have to report new hires immediately.
Inspections can now take place digitally to minimize disruptions to companies. The FKS will function as a "small public prosecutor's office," handling more cases independently, such as social benefit fraud [1].
The reform is expected to generate significant additional revenue from taxes and social security contributions, with the federal government anticipating additional revenue of around 858 million euros by 2029 [2]. The modernization of the FKS will initially involve costs of around 465 million euros for personnel and IT [4].
The FKS will also have access to the police information network to identify suspects more quickly. This will enable the agency to target suspicious employers more effectively [3].
The reform is part of the government's broader efforts to strengthen the fight against black work and illegal employment. The forestry industry will, however, be removed from the list of risk sectors [5].
The bill provides for expanded powers for the FKS in combating illegal employment and tax evasion. The cabinet's approval of the bill is expected to mark a significant step forward in Germany's efforts to protect legally employed workers, increase state revenue, and curb exploitation and criminal infiltration in vulnerable sectors [1][3].
[1] Bundesregierung [2] Finanzministerium [3] Fachverband der Steuerberater [4] Handelsblatt [5] Spiegel Online
- To enhance the nationwide battle against illegal employment, the Community policy on vocational training will be extended to sectors with rising illegal employment and associated criminal activities, such as barbershops, beauty salons, and nail studios, with the aim of curbing economic crimes and connections to organized crime syndicates.
- As part of the comprehensive finance reform, the strengthened Financial Control of Illicit Employment (FKS) agency will seek partnerships with business organizations and political bodies for general-news dissemination, to raise awareness about the importance of adhering to vocational training regulations and avoiding illegal employment practices.
