social dumping

Social dumping refers to a practice where workers — particularly those from countries with lower wage levels — receive significantly worse pay and working conditions than is standard for comparable work in the host country. In the EU/EEA context, the issue intensified after the 2004 enlargement, when workers from Central and Eastern Europe gained access to Western European labour markets.

How does social dumping work?

Social dumping typically occurs when employers exploit the fact that foreign workers are unfamiliar with local regulations and their rights. It can involve wages far below collective agreement levels, excessive working hours, inadequate safety equipment, or substandard housing. The sectors most exposed are construction, cleaning, transport, and parts of the service industry.

The problem extends beyond individual workers. When unscrupulous operators can offer lower prices by cutting pay and conditions, legitimate suppliers who follow the rules are undercut. This creates a race to the bottom that undermines the entire labour market.

Combating social dumping in public procurement

Contracting authorities play a central role in combating social dumping. EU Directive 2014/24/EU and the Enforcement Directive 2014/67/EU provide the legal framework, while individual member states implement specific measures. Key tools include:

• Labour integrity requirements as contract conditions — including limits on subcontractor chain length and requirements for compliant pay and conditions
• Rejection of abnormally low tenders that fail to meet labour law obligations (Article 69 of Directive 2014/24/EU)
• Exclusion grounds for operators convicted of labour law violations
• Posted Workers Directive (96/71/EC, revised 2018) establishing the principle of equal pay for equal work in the same place

Tools like Cobrief can help suppliers track which labour requirements and integrity conditions apply in different procurement procedures.

Enforcement matters

Research across Europe shows that setting requirements alone is insufficient — active contract monitoring is essential. In Norway, the National Audit Office found that 75 % of audited procurements lacked follow-up on labour conditions. The EU is currently reviewing its procurement directives with calls to make social criteria mandatory rather than voluntary, reinforcing the principle that public money should not fund social dumping.