What is a company in case of illegal work?
Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)
You must to declare to the Urssaf all work done by yourself or your employees. If you do not do so or only declare part of it, this work is considered illegal. He is also called "black" work or else concealed work. The controls carried out by the Urssaf are frequent. You risk sanctions criminal and financial. You are also responsible for the illegal work of your subcontractors.
Illegal work in your company
- You conceal all or part of a paid employment (examples: you do not don't declare an employee, you do not report the number of hours actually worked). It's about concealed work by concealment of paid employment.
- You do not report an activity (e.g. you are not registered in SCR: titleContent or at RNE: titleContent). It's about concealed work by concealment of activity.
- You're taking disposition of your employees by making profit. This is a labour loan (or haggle) illegal.
- You accumulate jobs without respecting the cumulation rules (example: you are exceeding the maximum number of hours worked.)
- You employ foreigner workers who have no work permit (visa, residence card, etc.).
- You're making a misrepresentation to obtain replacement income (partial activity, retirement, disability, etc.).
an exception is made for work that must be carried out in an emergency (imminent risk of accident or rescue of persons).
Illegal work of your subcontractor
You are responsible for the illegal work of your subcontractor.
You have a duty of care in relation to your subcontractor. It is up to you to ask him for proof of his declarations of activity.
If the contract is greater than €5,000 HT: titleContent, you must ask him every 6 months for a attestation of vigilance. It provides you with proof that he has properly declared his activities and his employees.
You're in danger the same penalties only if the illegal work is performed by your company.
What kinds of acts are illegal?
Your subcontractor performs illegal work in the following cases:
- It conceals all or part of a paid job (examples: it does not declare an employee, it does not declare the number of hours actually worked). It's about concealed work by concealment of employment employee.
- It does not report an activity (e.g. it is not registered in the SCR: titleContent or at RNE: titleContent). It's about concealed work by concealment of activity.
- It takes to disposition of employees by making profit, this is a labour loan (or haggle) illegal.
- He job cumulation without respecting the cumulation rules (example: it exceeds the maximum number of hours worked.)
- He employs foreigner workers who have no work permit (visa, residence card, etc.).
- He's making a misrepresentation to obtain replacement income (partial activity, retirement, disability, etc.).
In the event of a check, you may be subject to the following administrative penalties:
- Abolition of public aid (e.g. exemptions from social security contributions or aid for hiring an apprenticeship contract) for up to 5 years
- Repayment of public aid already collected over the last 12 months
- Exclusion from public contracts for a maximum period of 6 months
- Closure up to 3 months decided by the prefect with confiscation of professional equipment
In case of recurrence during the Last 5 years, a financial penalty is imposed on the client. Its amount shall be equal to all reductions in or exemptions from contributions or contributions received by it in respect of remuneration paid to all its employees during the period in which the concealed employment situation was established.
Administrative sanctions are different and independent of criminal sanctions (i.e. decided by a court).
Adjustment of contributions
The adjustment is to pay the social security contributions you should have paid, with a increase on amounts.
The adjustment applies by paying a lump sum.
The flat-rate basis shall be €10,998 (increase of 25%).
The increase is greater if the illegal work relates to one of the following:
- 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 organized gang
The flat-rate basis then amounts to €17,597 (increase of 40%).
The lump sum covers all social contributions and contributions, except unemployment insurance.
You have a maximum of 5 years to pay the adjustment.
You get a 10-point reduction in the mark-up rate if you pay the adjustment within one month of formal notice, or if you submit a payment schedule that is accepted, within the same 30-day period.
If you return within 5 years of a 1er adjustment, you must pay an increase in the following proportion:
- 45% if the mark-up on 1er recovery was 25%,
- 60% if the mark-up on 1er recovery was 40%.
if you can provide actual data on hidden compensation paid to employees, then the adjustment applies to this actual data.
In the event of conviction, the correctional court pronunciation of criminal sanctions.
The convicted person shall be punished by a fine and/or imprisonment. In some cases, one or more additional penalties may be imposed.
Fine and imprisonment
If you have committed an illegal labor offense, you risk up to 3 years in prison and €45,000 of fine (€225,000 if a business).
If the concealed work concerns a minor or a vulnerable or dependent person, the penalty is up to 5 years imprisonment and €75,000 of fine (€375,000 if a business).
If the concealed work is carried out in an organized group, the penalty is 10 years' imprisonment and €100,000 of fine (€500,000 for a business).
The labour loan illegal and the haggle shall be punished by 2 years' imprisonment and €30,000 of fine (€150,000 for a business).
If illegal labor lending and bargaining are committed in an organized gang, you risk 10 years in prison and €100,000 of fine (€500,000 for a business).
If you employ a foreigner without a work permit, you risk 5 years in prison and €15,000 fine per person (€75,000 for a business). If this offense is committed in an organized group, the penalty is 10 years' imprisonment and €100,000 of fine (€500,000 for a business).
If convicted, you could face the following additional penalties:
- Prohibition to exercise your professional activity for a maximum of 5 years
- Exclusion from public contracts for up to 5 years
- Confiscation of objects produced in the course of illegal work, or of professional equipment which has enabled the production
- Posting of judgment in newspapers
- Dissemination of the court decision condemning you (criminal decision) in a blacklist on the Ministry of Labor website. This distribution is mandatory and lasts for a maximum of 1 year for concealed labor offenses committed against minors, vulnerable or dependent persons, in an organized band or where there are several victims. Dissemination is optional and lasts for a maximum of 2 months when the concealed work is carried out without aggravating circumstances. The maximum period of dissemination is 2 years in the case of bargaining, illegal lending of labor or foreigner employment without a work permit.
- Prohibition of civil rights (e.g. voting rights) and civil rights (displacement, kinship, alliance, inheritance, etc.)
Who can help me?
Find who can answer your questions in your region
- Labor Code: Articles L8221-1 to L8221-2Definition of concealed work
- Labor Code: Articles L8222-1 to L8222-7Financial solidarity of contractors and project managers
- Labor Code: Articles L8224-1 to L8224-6Criminal sanctions
- Labor Code: Articles R8115-1 to R8115-4Administrative sanctions
- Labor Code: Articles R8211-1 to R8211-8Publication of criminal decisions
- Labor Code: Articles L8256-1 to L8256-8Criminal sanctions
- Labor Code: Article R8282-1Obligation of the payer
- Social Security Code: Article L133-4-2Abolition of reduction measures or exemption from contributions in the case of illegal work
- Social Security Code: Article L133-4-5Penalty in the event of illegal work by the subcontractor
- Social Security Code: Article L242-1-2Adjustment of social contributions
- Social Security Code: Articles L243-7 to L243-13Control of the Urssaf (Art L243-13: control over a maximum of 3 months for self-employed persons and companies with fewer than 20 employees)
- Social Security Code: Article L243-7-7Increase in redress in the case of illegal employment
- Social Security Code: Article L244-11Limitation period