Croatia expands digital monitoring to curb undeclared work in construction and hospitality

Croatia is extending its Unified Electronic Records system, funded by a €4 million European Social Fund Plus project, to sectors with high rates of undeclared employment such as construction and platform‑based work. The digital platform records working hours, shifts and breaks for delivery workers and drivers, allowing labour inspectors to compare activity with employment registrations, permits and tax payments. Authorities say the measure will help recover lost revenue, improve pension and health‑care contributions, and deter illegal labour practices.

Since January 2023, the Ministry of Labour has issued more than 1,100 enforcement decisions, confirming that undeclared work remains most common in construction and hospitality. Inspections have identified both Croatian nationals and foreign workers, with around 1,100 locals and 900 foreign nationals affected. Partial undeclared cash wages, which bypass pension and health‑insurance contributions, are also a significant concern. The government plans training sessions for employers and educational workshops for students across 20 county centres.

Officials estimate that the grey economy accounts for up to 30 % of Croatia’s GDP and note the presence of roughly 170,000 foreign workers in the country, many of whom are vulnerable to illegal employment. The expanded monitoring system is expected to strengthen labour‑market oversight, reduce unfair competition, and support broader social‑policy goals.