Seventy six per cent of construction companies have come across black economy operations in the last three months. In a new Construction Industry Federation (CIF ) survey on the black economy in the sector, 85 per cent of construction companies have also come across an increased number of black economy operations in the last 12 months.
Some other key statistics detailed in the survey include almost 20 per cent of construction companies believe that black economy activity in the construction sector has grown by more than 100 per cent since the downturn began.
Fifty two per cent of construction companies believe they have lost more than five jobs to black economy operations in the last 12 months.
Just under one in four construction companies are aware of public contracts being awarded to black economy operations.
Some 98.5 per cent of construction companies believe black economy operators pay their workers with cash outside of the tax system.
Sixty five per cent believe that wage rates offered to construction workers in black economy operations are undercut by more than 20 per cent.
Almost one in two construction companies have come across clients who have experienced problems with black economy operators or the work they have carried out, and 39 per cent have been asked to repair work carried out by a black economy construction operative.
Fifty six per cent believe that the materials used by black economy operators are lower in quality.
Ninty three per cent believe the Government needs to take stronger action to regulate black economy operators in the construction industry while 74 per cent believe the Revenue Commissioners should be responsible for ensuring regulations to combat the black economy are enforced.
Commenting on the survey, CIF director general Tom Parlon said: “For some time now it has been evident that there is a major problem with black economy activity in the construction sector. Legitimate construction operatives who obey their tax obligations and comply with the various regulations in the industry are finding it more difficult to win work. The fact is that they are being undercut by black economy operators when it comes to tendering.
“The black economy operators are able to do this because they are not paying tax, they are not providing their workers with the mandated wages and pensions, they are using lower quality materials, and they are not abiding by the various regulations and safety standards set for the construction industry. With so little work in the construction sector at present that is making life very difficult for those legitimate operators. Many have been forced out of business over the past couple of years and the black economy operatives are making that problem worse.”
The CIF has also put together some advice for helping individuals, householders, and businesses to avoid black economy operatives. These simple steps will allow the client to ascertain if they are dealing with a black economy operative. The steps to follow are ask for a contract, ask for a VAT number, check if they have a C2 certificate, ask about where the construction materials came from, ask if they have certified health and safety standards, check if they have insurance and ask if they are members of the CIF.
