Strengthening the battle against underhanded labor, Klingbeil promises - Escalating battle against exploitation of black workers, as announced by Klingbeil
Lars Klingbeil, the Federal Finance Minister (SPD), has introduced specific measures through new legislation aimed at combating black market labor, money laundering, and tax evasion in the hairdressing and cosmetics industry. These measures are designed to increase government revenues by more effectively detecting and preventing illegal economic activities in sectors such as barbershops, beauty salons, and nail studios.
Key measures include:
- Mandatory identification for employees: Workers in these targeted sectors must carry identification at all times, similar to regulations already applied in construction and hospitality. This will enable authorities to verify legal employment status.
- Enhanced enforcement by the Financial Control of Illicit Employment (FKS): The FKS is empowered to operate more effectively against serious economic crimes and organized crime in these industries. It will have the authority to independently investigate cases of fraud, reducing burdens on the judiciary.
- Improved digital networking and data-sharing: There will be modernization of digital enforcement tools, enabling instant reporting and better collaboration among government agencies to detect irregularities quickly.
- Tougher controls targeting black market labor and money laundering: The legislation aims to address rising illegal activities seen in barbershops and nail salons, including exploitation and connection to organized crime, thereby cutting off illicit revenue sources.
By tightening these controls, the government aims to reduce tax evasion and illegal employment in these sectors, thereby increasing formal taxable income and government revenues. The focus on digital and immediate enforcement tools is expected to enhance compliance and revenue collection effectively.
These reforms are part of a broader effort to protect the welfare of legally employed workers in these industries. The goal is also to better identify "black sheep" among subcontractors, such as on large construction sites.
The legislative reform is being carried out by the Federal Ministry of Finance (BMF) in Berlin. The finance ministry stated that tax evasion and black market work should be combated "as harshly as possible."
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- The Federal Finance Minister (SPD) has announced that the new legislation, which targets industries like barbershops, beauty salons, and nail studios, will incorporate a strict employment policy, requiring workers in these sectors to carry mandatory identification to verify their legal employment status.
- To tackle financial crimes and improve government revenues, the newly introduced measures in EC countries also focus on enhancing the role of the Financial Control of Illicit Employment (FKS) to combat organized crime and tax evasion, as well as improving digital networking and data-sharing for more effective detection and prevention of illegal economic activities.
