This article builds on previous studies concerning the question of street-level bureaucracy, an expression coined by Lipsky (1980) – Street-Level Bureaucracy. Dilemmas of the Individual in Public Services (New York: Russel Sage Foundation) – to highlight the importance of the discretionary power that professionals in public agencies exercise during the implementation of laws, standards and guidelines. Discretion may depend on the need to compromise between the limited resources available and the claims of citizens, or between administrative policy directives and assessments, on the one hand, and their interpretation by “street-level” bureaucrats, on the other. This article focuses on the dilemmas that labour inspectors face when dealing with employment irregularities involving domestic workers. Based on nine months of observations in a local office of the Italian Labour Inspectorate, it aims to understand how labour inspectors make use of their discretionary power when the workplace is the home. This article connects studies of street-level bureaucracy with the new institutional organisational analysis, focusing on the isomorphic pressures from the institutional field in which the labour inspectors operate, together with the manner in which such pressures shape labour inspectors’ discretion. Through this connection, the article aims to extend the scope of both theories.