Croatia steps up fight against working under the table

ZAGREB, 9 June 2026 – Croatia is set to expand its digital work monitoring system into sectors where undeclared employment is more common, as part of a new project worth nearly €4 million funded through the European Social Fund Plus.

The initiative will build on the existing Unified Electronic Records system and is expected to include sectors such as construction and platform-based work.

Working hours, shifts and breaks of delivery workers and drivers operating through digital platforms are already recorded electronically. The system has been introduced to help authorities combat undeclared work and improve the detection of labour-related irregularities.

Anita Zirdum, acting director of the Directorate for Labour and Occupational Safety, told HRT the system serves primarily as a tool for labour inspectors. It enables authorities to compare work activity with employment registrations, work permits and financial payments made by platforms to aggregators.

The system also provides the Tax Administration with greater insight into financial transactions, helping authorities identify potential irregularities more effectively.

Experts estimate that Croatia’s grey economy accounts for as much as 30 per cent of the country’s gross domestic product.

Undeclared work is believed to be particularly widespread in sectors employing large numbers of foreign workers.

Emil Priskić, president of the Croatian Chamber of Trades and Crafts, said hospitality and construction are among the sectors where such records are most needed.

Croatia currently hosts around 170,000 foreign workers throughout the year and during the tourist season.

While the electronic monitoring system currently covers workers on digital platforms, authorities plan to extend it to the construction industry over the next two years.

The Croatian Employers’ Association has welcomed the move, arguing that undeclared work creates unfair competition for businesses that comply with labour regulations, properly register employees and pay taxes and social contributions.

The records will be managed through a dedicated application, which officials say should reduce administrative burdens for employers while helping the state recover revenue lost through unpaid contributions.

Labour Minister Alen Ružić said higher budget revenues generated through improved compliance would also support the achievement of broader social policy goals. He added that the legal framework itself is expected to have a preventive effect by encouraging employers to comply with regulations.

To help businesses adapt to the new system, training sessions will begin shortly across Croatia. Marija Šćulac, vice-president of the Croatian Chamber of Economy, announced that educational workshops will be held in 20 county centres at Chamber facilities.

Alongside business training programmes, educational initiatives will also be introduced in secondary schools to raise awareness among young people about the importance of legally registered employment.

The government expects the expanded electronic monitoring system to strengthen labour market oversight, reduce undeclared work and improve compliance across sectors where labour abuses are considered most prevalent.