It is an open secret that for many years now, almost all women who clean private households in Germany have been working illegally. This is how taxes are evaded on a massive scale and social security fraud is committed. Why is that?
In one of the Munich domestic helper companies, where employees are employed on a permanent contract, the hourly wage costs customers 29 euros. “There is a high enough demand”, manager Zilke Kamm tells ARD, but she says that she has difficulty finding workers. “The black market takes them away from us. Some people have very serious financial problems and in this case every euro counts - you want to take cash to spend immediately,“ she says.
Economist Dominik Enste from the Institute for German Economics in Cologne has been studying the issue of undeclared work in private households for years and says the problem remains big. One reason is that this type of work has a long tradition. In addition, private individuals do not want to pay hired cleaners sick pay, let alone vacation. And many also want to avoid bureaucratic obstacles.
It is often not worth working legally
The political idea of combating undeclared work by officially employing people at a minimum wage has not borne fruit and is rarely implemented. “Domestic helpers have no incentive to register, since in most cases they are insured by a family member,“ says Enste. And with an activity like cleaning, they cannot significantly improve their pension level.
In general, undeclared work brings great benefits, and the probability of being discovered is very low. Customs services, which in Germany must control and uncover such cases, are not allowed to enter private households. Offenses are most often discovered in work accidents or based on information from neighbors, explains the ARD.
Platforms like “Helpling“ mediate work for cleaners who are self-employed - i.e. they take care of their own taxes and social expenses. But as a study by the “Hans Böckler“ Foundation reveals, many of the staff on this platform have not registered as independent entrepreneurs at all, which means they do not pay taxes. ARD notes that the platform does not undertake any social or health insurance - so everyone bears the possible risk of work accidents and heavy physical exertion on their own.
With vouchers against the black market
Labor market expert Peter Hammer calls on politicians to take action: the state should introduce a model including supplements or vouchers to counteract the illegal black market. This idea was included in the coalition agreement of the last government, but was never implemented.
In Belgium, the state does exactly that, ARD points out. It subsidizes legally registered domestic work with vouchers - for all citizens. For example, Elvina cleans the Santis family's home in Belgium for four hours a week. She is registered with a cleaning company and receives 14 euros per hour plus travel expenses, sick leave and vacation. The family only pays ten euros for her work, the remaining 19 come from the state.
As manager Olivier de Kock told the German public-law media, undeclared work has been reduced by more than half - because it is no longer profitable for households to hire someone illegally. It would be more expensive than with vouchers.
150,000 new jobs in Belgium
A study in Belgium found that 150,000 jobs were created in this way, which are used by over a million families in the country. The newly created jobs cost the state 2.5 billion euros. But along with the saved social benefits, taxes paid and pension contributions, 88 percent of these costs are returned to the budget. And the cleaners are socially insured.
Could this also happen in Germany? The Christian Democrats want to improve the taxation of household services. The Liberals are in favor of stricter measures against undeclared work, the Greens want to limit abuses on platforms, and the Social Democrats are “in favor“ of directly subsidizing household services.