Under the Act on Combating Illegal Employment of July 23, 2004, a person engages in illegal employment if they provide services or have services performed and, in doing so,

1. as an employer, business owner, or self-employed person subject to social security contributions, withholds social security contributions by violating their reporting, contribution, or record-keeping obligations, or
2. as a taxpayer, evades or underpay taxes,
3. as a recipient of social benefits (e.g., unemployment benefits, unemployment benefit 2, welfare), fails to fulfill their statutory notification obligations to the social benefits provider, in particular by failing to report the commencement of employment,
4. as a business operator, fails to comply with the obligation to register the business (Section 14 of the Trade Regulation Act) or has not obtained the required itinerant trade license (Section 55 of the Trade Regulation Act),
5. as a self-employed person, operates a trade requiring a license without being registered in the trade register (§ 1 of the Crafts and Trades Code).

Offenses involving undeclared work listed in Nos. 1–3 are investigated by the customs administration. If you have any questions, please contact your local main customs office. Further information is available from the Department for Financial Control of Illegal Employment at the Cologne Regional Finance Office or online at the websites listed below.

Violations of trade and commercial law ( Nos. 4 and 5 ) are prosecuted by the municipal authorities responsible for combating undeclared work. These are generally the rural districts, independent cities, and large autonomous cities. Staff members at the Lower Saxony Ministry of Economic Affairs, Labor, and Transportation in the regional offices, whom you can also contact via the email address schwarzarbeitsbekaempfungmw.niedersachsende. For data protection reasons, we are unable to provide feedback on your reports.

Assistance provided by family members or partners—whether as a favor, through neighborly assistance, or as self-help—remains permissible as long as it is not intended to generate a profit on a long-term basis.

The Consequences

Anyone who commissions or performs undeclared work and, in doing so, evades taxes, fails to pay social security contributions, or fraudulently obtains social benefits is committing a criminal offense that can be punished by a fine or, in serious cases, by imprisonment for up to 10 years. Illegal employment that is prosecuted as an administrative offense can be subject to fines of up to 300,000 euros.

In addition, exclusion from public contracts is a risk in many cases.

What can I do?

Illegal employment causes great harm. Therefore,

• do not work off the books, and
• do not hire undocumented workers,
• be vigilant, and report any violations to the relevant authorities responsible for combating undeclared work.