Tuesday, 17 December 2019

Questions (715, 716, 717, 718)

Darragh O'Brien

Question:

715. Deputy Darragh O'Brien asked the Minister for Employment Affairs and Social Protection the estimated cost of bogus self-employment; the steps she plans to take to address the issue; and if she will make a statement on the matter. [53164/19]

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Darragh O'Brien

Question:

716. Deputy Darragh O'Brien asked the Minister for Employment Affairs and Social Protection the number of inspectors in the employment status investigation unit established to focus solely on bogus self-employment; the number of inspectors she plans to have in place; the target number of investigations to be carried out by the unit in 2020; the percentage of workplaces that will be inspected; and if she will make a statement on the matter. [53165/19]

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Darragh O'Brien

Question:

717. Deputy Darragh O'Brien asked the Minister for Employment Affairs and Social Protection the number of inspections carried out by inspectors in each of the years 2016 to 2018 and to date in 2019 focusing solely on the issue of false self-employment, in tabular form; and if she will make a statement on the matter. [53166/19]

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Darragh O'Brien

Question:

718. Deputy Darragh O'Brien asked the Minister for Employment Affairs and Social Protection the number of suspected false self-employment cases that were and are being dealt with in each of the years 2016 to 2018 and to date in 2019; and if she will make a statement on the matter. [53167/19]

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Written answers (Question to Employment)

I propose to take Questions Nos. 715 to 718, inclusive, together.

Work is underway in my Department to tackle false self-employment wherever it may be occurring across the economy.  In that regard I have reallocated resources to this issue to understand, measure and quantify better the prevalence of false self-employment and obtain a sectoral analysis of its level of incidence.

My Department is focussed on increasing the number of employer inspections it conducts nationwide.  I have also established a dedicated team to work strategically in this area.  This team – the Employment Status Investigation Unit – commenced its work in September, in parallel with other inspectors across the country.  The Unit had five inspectors when it formed and this will shortly increase to eight. It is my intention to grow the Unit further early in the new year.  The Unit is currently evaluating its work so far and formulating plans for 2020.  While the Unit concentrates on complex cases, more generally a portion of the Department's approximately 350 Social Welfare Inspectors nationwide has also been tasked to deal with routine cases of false self-employment as part of their broader employer inspections remit.

Scope Section is the section of my Department that determines, among other things, whether a person is an employee or is self-employed for the purposes of PRSI classification.  Of all the cases referred to Scope Section, those involving the mis-classification of an employee as being self-employed – what we might call ‘false self-employment’ – constitute a small proportion. 

Number of all cases referred for Scope decision  

Year     

All cases referred        

All cases decisions made     

2015

1,220

1,064

2016

1,446

1,027

2017

1,473

1,065

2018

2,067

1,339

2019 (to end November)

1,526

1,320

It is important to note that these cases do not always involve a deliberate or fraudulent mis-classification of a worker as being self-employed. Sometimes it happens that both employer and employee are genuinely mistaken in their approach and are happy to correct the position once the Department’s officials make a determination.

Since its formation, the Employment Status Investigation Unit has carried out 23 inspections targeted towards detecting false self-employment.  Two of these are completed and resulted in referrals to Scope Section.  In one case, five employees were confirmed as being self-employed and, in the other case, two employees were deemed to be employees for the purposes of PRSI. The latter case is currently under appeal to the Social Welfare Appeals Office.

General employer inspections are also carried out on a continuous basis by Social Welfare Inspectors and Special Investigation Unit inspectors, including on a joint basis with Revenue and the Workplace Relations Commission. There are approximately 350 inspectors in the Department currently. These inspections can result in a variety of outcomes, such as overlapping social welfare payments and employment, underpayment of PRSI, incorrect PRSI records, etc.  The detection of the potential mis-classification of employees as being self-employed can also result from such general inspections.  In such cases, inspectors investigate these situations when they find them and refer the case to Scope Section for a ruling as to employment status. In 2018, inspectors referred 22 such cases to Scope; the figure for 2019 to end November was 29.

I am advised that it is not possible to provide figures on money recouped on the sole basis of false self-employment cases alone.  However, as an indication of the level of work going on in relation to PRSI inspections generally, inspectors carried out 2,055 employer inspections in 2018, and in 2019 (to end November) 3,099 inspections were carried out.  Savings for 2018 were €4.742m and  in the 11 months to November 2019 were €2.173m.  False self-employment cases form a portion of those figures.

I hope this clarifies matters for the Deputy.