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What is the risk of a company in case of illegal work?

Verified 01 January 2022 - Legal and Administrative Information Directorate (Prime Minister)

You report to the Urssaf all work by yourself or your employees. If you do not do this or only report part of it, this work is considered illegal. It is also called black work or hidden work. The checks carried out by the Urssaf frequent. You risk sanctions criminal and financial. You are also responsible for illegal work by your subcontractors.

Illegal work in your company

The following acts are considered illegal work:

  • You report an employee (hidden work)
  • You do not report an activity (example: false statement of actual hours worked)
  • You make your employees available by making profits, this is a labour loan (or bargaining) illegal
  • You accumulate jobs without respecting stacking rules (example: you exceed the maximum number of hours worked)
  • You employ foreigner workers who do not have a work permit (visa, residence card, etc.)
  • You make a false return for replacement income (partial activity, retirement, disability, etc.)

Please note

an exception is made for work that must be carried out in an emergency (risk of imminent accident or rescue of persons).

Illegal work by your subcontractor

You are responsible

You are responsible for the illegal work done by your subcontractor.

You have duty of care to your subcontractor. It is up to you to ask him for proof of his activity statements.

If contract is greater than €5 000 HT, you have to ask him every 6 months one vigilance certificate. It provides you with proof that it has properly declared its activities and employees.

You risk same sanctions only if the illegal work is done by your company.

What kinds of acts are illegal?

Your subcontractor does illegal work in the following cases:

  • It does not report an employee (hidden work)
  • It does not declare an activity (example: false statement of actual hours worked)
  • It makes its employees available by making profits, it is a labour loan (or bargaining) illegal
  • It cumulative without respecting stacking rules (example: exceeds the maximum number of hours worked)
  • It employs foreigner workers who do not have a work permit (visa, residence card, etc.)
  • He makes a false declaration to obtain replacement income (partial activity, retirement, disability, etc.)

FYI  

a fine shall be imposed on the subcontractor and his principal when he detaches employees to the foreigner in the course of illegal work. It is €4 000 per posted employee (€8 000 in case of recurrence).

Administrative sanctions

In case of control, you risk the following administrative penalties:

  • Abolition of public aid (e.g. tax exemptions or aid for hiring a learning contract) for up to 5 years
  • Repayment of public aid already received in the last 12 months
  • Exclusion of public contracts for a maximum period of 6 months
  • Closure of up to 3 months decided by the Prefect with confiscation of professional equipment

Please note

administrative sanctions are different and independent of criminal sanctions (i.e. decided in court).

Recovery of contributions

The adjustment is to pay the social contributions you should have paid, with a increase on amounts.

The adjustment applies by paying a lump sum.

The flat-rate basis shall be €10,284 (increase of 25%).

The increase is greater if the illegal work involves one of the following cases:

  • Several people are employed
  • There is a minor (who should be in school)
  • A person is vulnerable or dependent
  • The crime is committed in an organised gang

The flat-rate basis then amounts to €16,454 (increase of 40%).

The package covers all social contributions and contributions except unemployment insurance.

You have a maximum of 5 years to pay the adjustment.

You receive a 10-point reduction in the rate of the increase if you pay the adjustment within one month of notice, or if you submit an accepted payment schedule within the same 30-day period.

If you re-offend within 5 years following a 1to adjustment, you must pay an increase in the following proportion:

  • 45% if the increase on 1to adjustment was 25%,
  • 60% if the increase on 1to adjustment was 40%.

Please note

if you can provide actual data on employee concealed compensation, then the adjustment applies to that actual data.

The sanctions decided in a trial are called criminal sanctions.

This may include fines, imprisonment or other penalties.

Fines and imprisonment

If you have committed an illegal labour offence, you risk up to 3 years in prison and €45,000 (€225,000 if it is a business).

If the concealed work involves a minor or a vulnerable or dependent person, the penalty goes up to 5 years imprisonment and €75,000 fine.

Loans of illegal labour and bargaining are punished by 2 years imprisonment and €30,000 (€150 000 for a business).

If you employ foreigners without a work permit, you risk 5 years' imprisonment and €15 000 fine per person (€75,000 for a business).

If the offence is committed in an organised gang, the penalty is 10 years' imprisonment and €100 000 fine.

Complementary penalties

In the event of a conviction, the following additional penalties may apply:

  • Prohibition of your professional activity for up to 5 years
  • Exclusion of public contracts for up to 5 years
  • Confiscation of objects produced in the course of illegal work, or of professional material which enabled production
  • Log judgement display
  • Dissemination of the judgement against you (criminal judgement) in a blacklist on the ministry of labour website. This broadcast lasts 1 year. For concealed labour offences committed against minors or vulnerable persons, the maximum duration of dissemination shall be 2 years.
  • Prohibition of civil rights (example: voting rights) and civilians (displacement, kinship, alliance, inheritance, etc.)

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