No contract, an employee not registered with the social security system, or work carried out without authorisation: the Luxembourg Labour Code classifies these situations under the term “illegal employment”. The legislation does not use the term “undeclared work”, as the Minister for Labour points out, Marc Spautz (CSV), in a response to a parliamentary question. He states that the law specifically targets activities carried out without authorisation, as well as situations that do not comply with the rules relating to social security and payroll deductions.

1,613 unannounced inspections between 2023 and April 2026

Between 2023 and 30 April 2026, the Labour and Mines Inspectorate (ITM) carried out 1,613 unannounced inspections. Of these, 508 revealed irregularities relating to the employment of staff. The authorities explain that these cases mainly concern the absence of an employment contract or the lack of registration with the Joint Social Security Centre.

In 2023, inspectors carried out 581 unannounced inspections and identified 182 irregularities affecting 334 employees. In 2024, the ITM conducted 591 inspections and identified 171 irregularities affecting 321 employees. The total amount of fines then reached €342,000. In 2025, there were 369 inspections, 119 irregularities and 213 employees affected, with fines totalling €430,750. Between January and April 2026, the ITM’s services have already carried out 72 inspections, detected 36 irregularities and identified 63 affected employees. Regularisation procedures remain “ongoing” for this period, according to the parliamentary response.

No report has been forwarded to the Crown Prosecution Service

The Ministry states that no reports have been received by the Public Prosecutor’s Office regarding illegal employment in the strict sense of the law. “It has never been established that a person has carried out work” falling directly within the situations defined by Article L.571-1, the parliamentary response states.

Marc Spautz also points out that the Grand Ducal Police and the Customs and Excise Administration are responsible for investigating offences in this area. For its part, the ITM takes part in joint inspections with the two agencies when a situation falls within the remit of more than one authority.

The hospitality sector is well ahead

Figures provided by the Ministry show that irregularities are concentrated in the hospitality sector. In 2023, the sector accounted for 215 of the 334 employees found to be in breach during inspections. The construction sector followed with 36 employees found to be in breach, ahead of the leisure sector with 25 employees and the retail sector with 21 employees.

In 2024, the hospitality sector accounted for 227 of the 321 employees affected. The construction sector has 25 cases, leisure activities 23 and transport 16. In 2025, the hospitality sector remains in the lead with 132 employees affected, whilst the construction sector has 28 cases and the retail sector 13.

The figures for the first four months of 2026 show the same trend. The hospitality sector accounts for 37 of the 63 employees affected. The retail sector follows with ten employees, ahead of construction, foreign companies (excluding posted workers) and cleaning services.

Tighter controls in several sectors

Marc Spautz states that the ITM, the Grand Ducal Police and the Customs and Excise Administration organise joint inspections on a “regular basis”. These operations primarily target sectors in which the authorities identify the most irregularities, notably the hospitality sector, construction and retail.