Nine out of ten domestic workers in Germany are employed illegally

According to a study conducted by the Institute of the German Economy (Institut der deutschen Wirtschaft, IW), nine out of ten domestic workers in Germany are employed illegally. Some 3.6 million households in the country employ black workers. For the study, the researchers compared the survey results with the number of reported employment contracts.

According to the analysis, about four million households employ people to help with housework. However, the relevant authorities have only registered about 400,000 such employment relationships, 330,000 of which are Minijob employment. According to the Institute of the German Economy, it is mainly the higher earners who benefit from help with housework. The average monthly income in households employing domestic helpers is 4,800 euros. In addition, households with dependents are also very often using these services.

A voucher system could counteract illegal employment

However, illegal employment comes with risks: workers have to live in Germany without insurance protection and social security. According to a proposal by the Institute of the German Economy, a voucher system should be introduced to counteract this. In this system, the state would in a way subsidize the wages of domestic workers. This would create an incentive to register – “probably without significant tax consequences”, as the researchers stress.

According to Institute staff, the cost of such a subsidy could be offset by a reduction in illegal employment. A similar effect could be induced by an increase in labor force participation among those who, thanks to the introduction of the voucher system, would decide to employ domestic help.


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