RECENT VAT rises will lead to more people working “on the black,” meaning less rights for employees and substantial risks for the employer, fear firms which supply home service workers such as cleaners and nannies.
One company O2 has launched a campaign against undeclared work with 20 firms signed up on going to press, under the slogan Le travail au noir, c’est ringard (Working on the black isn’t cool).
It follows a survey commissioned by O2, showing one in three people were working, or had worked, “on the black” (ie without being declared and without social charges or VAT) compared to 13% in 2008.
Furthermore, 19% had employed people “on the grey” – only declaring some hours worked - for home help (up from 1% in 2008); 32% for assisting the elderly and almost a quarter for gardening.
More than half of babysitting or home tutoring work was “on the black” or “grey”.
Working on the black is especially prevalent where members of the public pay people directly for work.
They are technically employers and should be paying social charges, for example via the Cesu system. It also often takes place in the construction industry.
Campaign spokeswoman, Majida Guettaoui, said it was feared the situation would be getting worse after VAT on many home services like childcare, cleaning, help with homework etc. rose from seven to 10% in January.
VAT must be charged where a firm bills members of the public for work, as in the case of home service firms. VAT on, specifically, gardening, home tuition and IT help was also increased to the top rate of 19.6% in July, 2013 under EU pressure - this rose last month to 20%.
As a counterpart, however, ceilings were raised for the amount of payments for these that could attract 50% tax credits or reductions.
There are significant disadvantages to employing on the black, not only for the employee, who loses social security advantages, but also for the employer who:
-Lacks rights should they want to make a complaint against the employee for theft, substandard or incomplete work etc.
-Risks being fined €45,000 and being jailed for three years.
- May face financial responsibility if the employee is left unable to work, potentially including payments for life, due to a work accident.
Ms Guettaoui said: “A lot of households are taking people on undeclared and work ‘on the grey’ is a new phenomenon that’s growing fast – declaring only some hours so workers are in the social system.
“It’s too soon to say the full impact of the recent VAT rise but it’s greatly feared it will have a major effect.
“There have already been repercussions due to the rise for gardening, with people paying for fewer hours of declared work, and because of this further rise the campaign has been launched.
Some people working for home services firms might be tempted to offer extra hours on the grey or customers might suggest they work on the black for them because they notice the price has risen; or they may simply leave and find another worker on the black instead.”
An option for people who employ at home to pay minimal social charges on a forfait (fixed) basis was abolished last year, which may also have increased the temptation to bypass formalities.