The number of workers being employed illegally by companies in the tourist industry has been on the rise.
Sigríður Mogensen, an economist working for the Confederation of Icelandic Employers (SA) told RÚV that their first indications actually come from the amount of tax revenue generated by tourists themselves.
“Foreign tourists increased by 30% from 2008 to 2012,” she said. “At the same time, tax revenue per tourist actually decreased by 11%.” As no significant changes were being made to tax laws related to tourism during this time, SA believes the most likely explanation is an increase in undocumented workers.
Unregistered workers are not a new phenomenon in Iceland. In 2011, it came to light that unregistered work in general was increasing in Iceland. Most of these suspected incidences of undocumented work are occurring in the fields of restaurant work, auto repair and construction.
A study conducted the same year by the tax authority, the Confederation of Icelandic Labour Unions, and the Confederation of Icelandic Employers showed that the practice costs Iceland billions. These costs are incurred on the nation treasury, municipal budgets, lost union dues, and even on the employees themselves, who more often than not are denied the benefits guaranteed by law to registered workers.