As reported by HRT in the program Studio 4, Croatia is preparing for a significant tightening of the fight against undeclared work.

State Secretary Ivan Vidiš confirmed that there are currently 670 employers on the so-called blacklist who will be under special scrutiny by the competent authorities in the coming period. According to data presented on HRT, in the period from the beginning of 2023 until the end of 2025, employers were ordered to pay more than 5 million euros into the budget, while 3.4 million euros has so far been paid voluntarily. The digitalization of the system has enabled effective linking of the Tax Administration, pension and health insurance, and the State Inspectorate, giving the authorities clear insight into irregularities that previously went under the radar.

New legal amendments and high financial penalties

Amendments to the Act on Combating Undeclared Work should enter into force in mid-June and bring significantly stricter penal provisions for all offenders. In an interview for HRT, Vidiš pointed out that fines for repeat offenders, that is, those who repeat the offense three times within 3 years, reach the amount of 8,000 euros. Although the law leaves some room for those for whom this is a first offense, the primary goal is to eliminate the practice of working without registration for insurance and paying wages in cash. In the program Studio 4 the State Secretary emphasized that working without a work permit represents a serious security and social risk because it bypasses checks of workers' qualifications, health status, and criminal records, which endangers the entire community.

A blow to unfair competition and protection of workers' rights

The Ministry of Labour is seeking through these measures to protect honest entrepreneurs who duly meet their obligations to the state and workers. The current situation on the market creates unfair competition, which directly harms the business of those who fully comply with the law. As explained in the program Studio 4, the low implicit tax rate on labor in Croatia does not justify avoiding contributions from which healthcare, education, and the pension system are financed. Workers who agree to undeclared work often become aware of the extent of the damage only upon retirement, when they realize that due to unpaid contributions their income is insufficient for a dignified life in old age.

Restrictions for employers on blacklists

In addition to direct financial penalties, employers who end up on the blacklist will face serious operational restrictions that may jeopardize their further business operations. According to statements from Studio 4, companies on the list of offenders automatically lose the right to import foreign labor, which is an extremely severe sanction in conditions of a chronic shortage of workers on the domestic market. Also, such employers will no longer be able to use active employment policy measures or any state aid and subsidies. The State Inspectorate has significantly accelerated the procedures for issuing decisions, thereby sending a clear message that violations of workers' rights and avoidance of legal obligations will no longer be tolerated in the Croatian economy.

The announced legal changes and intensified supervision should not be viewed exclusively through the prism of repression, but as a necessary step toward the long-term stabilization of the labor market. By introducing order into the system, fairer market competition is ensured in which success depends on the quality of work and competitiveness, and not on the skill of avoiding tax obligations. The consistent application of the new rules and effective supervision of reported companies will show whether the state is truly ready to permanently eradicate undeclared work. The ultimate goal of these changes remains the creation of an environment in which worker safety and business transparency will be the foundation of economic growth, thereby ensuring the long-term stability of society as a whole.