Disguised employment, commonly known as bogus self-employment, occurs when businesses deliberately misclassify workers as being self-employed when they are de facto employees of the business concerned. This is done largely to avoid payment of the employer portion of social insurance contributions and to limit the accrual of employment rights.
I share the Deputy's concerns that any attempts by employers to misclassify workers, no matter the number of employers concerned, must be properly policed and appropriate sanctions enforced.
There are already strong legislative provisions within the Social Welfare Consolidation Act 2005 prohibiting the practice of misclassifying employment.
Deliberate misclassification of employment status is a criminal offence subject to fines and-or imprisonment on conviction. Given the concerns expressed, I now wish to bring renewed focus to the enforcement of these provisions. Therefore, I am reallocating resources in my Department to increase the level of inspections. However, I do not intend that inspections should be limited to any sector. We would be missing the point if we did that. While the construction sector will feature, no market sector will fall outside the potential for inspection and enforced compliance.
Based on experience from inspections already completed and recognising that there is a particular challenge when dealing with large companies or companies with complex legal structures, I have also tasked the Department with establishing a focused team to tackle these complex cases and provide themselves with expert training to ensure that, in the context of the hidden cases, no wool is pulled over anyone's eyes. The first members of this team are being assigned to their new roles as we speak. I will recruit additional members later this year.
In addition to more rigorous policing of the existing law, I intend to introduce a number of new legislative measures to strengthen the requisite powers further. These measures include putting the newly revised guidance on determining employment status on a statutory footing and introducing measures to address the potential victimisation of workers who seek a determination on their employment status.
Additional information not given on the floor of the House
These latter provisions will likely mirror similar provisions I brought into law earlier this year via the Employment (Miscellaneous Provisions) Act 2018. I also intend to introduce provisions to apply interest charges to employer PRSI payments in cases where payments were underdeclared as a consequence of the incorrect classification of workers. Subject to legal advice on these matters, I intend to progress them through an appropriate legislative vehicle in the coming months. While the drafting of this legislation is complex, its timely introduction to the Oireachtas remains a priority.