Supervision of the use of foreign labour: bogus self-employment and obstacles to information exchange between authorities

In 2024, the supervision of the use of foreign labour revealed even more cases where an employment relationship was disguised as entrepreneurship. The nature of the legal relationship between employment and entrepreneurship was assessed for a total of 185 persons. Of them, 168 were found to be in an employment relationship. In their case, the inspector assessed that the definition of employment in the Employment Contracts Act was met, making it an employment relationship and not entrepreneurship.

In many of these cases, the work was subject to a commission agreement, but in practice, the work was managed as if it was an employment relationship. An employment relationship might have been changed into a commission agreement without the employee’s understanding. The terms of a commission agreement often seem like the terms of an employment contract. This phenomenon has become more widespread and is particularly prevalent in the construction sector, but also in industry, the cleaning sector, car repair shops, car wash shops and seasonal work.

Supervision findings indicate that foreign workers have an increased risk of their employment relationship being disguised as entrepreneurship, for example because of poor language skills. In such a situation, the person is excluded from the protection provided by labour legislation in terms of pay, insurance and the Occupational Safety and Health Act. Based on the findings, false and forced self-employment has become part of labour exploitation.

Supervision is hampered by obstacles to information-sharing

Cooperation between authorities enhances the supervision of the use of foreign labour and combating the grey economy. Joint inspections by authorities increased by almost half in 2024.

The occupational safety and health authority’s right of access to information has improved in recent years. Two especially important resources for supervision are the Register of Aliens and the Incomes Register. It may be possible to detect undeclared wages by comparing the information of employees encountered during an inspection with information in the Incomes Register. The Incomes Register is also used to determine the duration of unauthorised work.

Still, there is room for improvement in the exchange of information. For example, there are only very limited situations where the Tax Administration can provide the occupational safety and health authority with information on the abuses it has detected that fall within the competence of the occupational safety and health authority. The exchange of information between authorities is also restricted by the confidentiality of informants’ information referred to in section 10 of the Enforcement Act. The occupational safety and health authority is often notified of shortcomings that do not require occupational safety and health enforcement, but the confidentiality provision may prevent disclosing the information to the competent authority.

Nearly one in two inspections revealed shortcomings in wages

The supervision of the use of foreign labour focused on the minimum terms of employment and the right to work. In these respects, supervision findings were similar to previous years. Deficiencies in pay were observed in almost half of the inspections where that issue was assessed. 

Read more in the report

Original report in Finnish: Ulkomaisen työvoiman käytön valvonta vuonna 2024 (pdf).

The report will be published later in English on the Publications page and in Swedish on the Rapporter page of Tyosuojelu.fi.