Dáil Éireann Debate, Tuesday - 22 March 2022
78. Deputy Louise O'Reilly asked the Minister for Social Protection the steps her Department is taking to uncover, address and reduce bogus self-employment from a social insurance perspective, especially in State-funded agencies or in areas in which public monies are being spent; and if she will make a statement on the matter. [7298/22]
Amharc ar fhreagraOne of my Department’s roles is to ensure the correct class of PRSI is being returned for individuals, in order to protect their PRSI contribution record and future welfare entitlements. We must also ensure the correct flow of funds into the Social Insurance Fund.
To begin with, it is worth noting that there are approximately 340,000 self-employed individuals in Ireland, the vast majority of whom are genuine entrepreneurs operating their own businesses.
The term 'bogus self-employment' is a provocative one that implies falsehood and a deliberate attempt to commit fraud. However, false self-employment does not always involve a deliberate or fraudulent misclassification of an employee. 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. Accordingly, it is clear that the misclassification of employees for PRSI purposes can occur through a lack of knowledge or error or due to changes that occur over time in the relationship between an employer and its contractors. Therefore, it is really important that employers and workers have clear information and guidance when looking at employment status. That is why I put great value on the Code of Practice on Determining Employment Status. I published a revised version of this Code last year ensuring that it reflects both the modern world of work, and the relevant legislation and case law that has emerged from various court cases over the years. I would encourage all affected stakeholders to make sure they are familiar with its content.
It is also worth noting that there is no compelling evidence that false self-employment is widespread, as some might suggest. That said, it does exist and, as such, is a matter that I and the Department take very seriously. I do not want to see a situation where any workers are denied their social insurance entitlements or where much-needed funds are denied to the Social Insurance Fund. Therefore, I want to be very clear that, where it does occur, the deliberate misclassification of a worker as a self-employed contractor for PRSI purposes, in a situation where they are actually working as an employee, is wrong. That is why the Social Welfare Consolidation Act contains specific offences in relation to the return of employment contributions which, on conviction, can result in fines and/or imprisonment.
There is no ‘silver bullet’ solution that would completely eradicate false self-employment. The primary way to deal with it is through inspection, compliance and deterrence. My Department's Employment Status Investigation Unit (ESIU) is a team of Inspectors with the sole objective of investigating false self-employment. Since it was established in late 2019, the unit has investigated over 500 employers. Additional resources are currently being allocated to both investigation and decision-making units in the Department to increase efforts in this area.
In addition to the ESIU, there are approximately 380 Social Welfare Inspectors appointed nationwide who carry out work across the various social welfare schemes. This includes engagement in a programme of employer inspections nationwide in which they investigate employment status as part of their more general duties. More than 100 of these Inspectors are members of the Department’s Special Investigation Unit who work specifically to detect social welfare fraud. My Department’s Inspectors also work jointly with other agencies including the Revenue Commissioners and the Workplace Relations Commission.
This Government takes the issue of false self-employment very seriously. A new working group, to be chaired by Minister English, to review false self-employment was recently announced by the Tánaiste. This will bring my Department together with the Department of Enterprise Trade and Employment, the WRC, Revenue and various social partners representing both workers and employers to examine this area to see what further measures may be possible.
If someone has any individual concerns of false self-employment or bad practice in this respect, they can provide my Department with the details and investigators will be more than happy to review the employment.
I hope this clarifies the matter for the Deputy.
