The State has lost out on up to €600 million in lost taxation revenue since 2007 as a result of a huge growth in "bogus self employment, the Irish Congress of Trade Unions (Ictu) has said.
A new report published by Ictu suggests every bogus self employed worker equated to a loss of €2,886 in PRSI payments to the exchequer each year.
Report author Fergus Whelan said current figures showed there were 27,600 sole traders operating in the construction sector.
However, he said there were no adequate controls to ensure all were legitimate.
He said there was a huge financial advantage for main contractors to mis-designate workers as self-employed because they then escaped having to make PRSI payments.
Mr Whelan said in 2007 trade unions, employers and the Revenue Commissioners agreed a code of practice to tackle the issue of bogus self-employment.
However, this system was not policed by the Revenue Commissioners and as a result the number of bogus self-employed workers shot up, Mr Whelan said.
He added: “In 2012, Revenue changed from a paper-based application system for contractors to an on-line system. A number of controls were lost with the move online and the numbers have risen since.”
He said under the bogus self-employment system, not only did the State lose out on revenue but workers lost employment protections and social insurance cover.
