Tighter controls and penalties against undeclared work and Social Security fraud

Automatic summary, not yet reviewed

1. When a company hires another to perform work that is part of its own activity, it is jointly liable for the Social Security debts of its contractors and subcontractors for three years, instead of the one year previously required for wage obligations.
2. Companies must report, before they happen, changes to the calendar of contract suspensions or working time reductions, and the reference to the special agreement in collective dismissal proceedings is adjusted.
3. The Labor and Social Security Inspectorate will find it easier to act: it can access data from notaries, the tax authorities and other administrations, and its checks can last up to nine months, extendable by another nine in cases of special difficulty, obstruction or international cooperation.
4. The list of offenses and penalties is toughened: conduct such as failing to register workers, withholding workers' contributions without paying them in, or employing people receiving benefits incompatible with work is classified as serious or very serious. Fines increase according to the amount unpaid and the number of people affected, and companies can lose aid and rebates.
5. Companies that contract out works or services must verify, before the activity starts, that the workers involved are registered with Social Security.
6. The Government will create a special unit to support courts and the State Attorney General's office in fighting undeclared work, will evaluate the measures' effectiveness every year, and will set up an electronic query system so main employers can check whether their contractors meet their Social Security obligations.

Who it affects

• Companies that contract out works or services: They must verify that contractors' workers are registered with Social Security and are jointly liable for three years for their Social Security debts.
• Companies that fail to register workers or withhold contributions without paying them in: They face tougher fines, scaled by the amount unpaid and the number of people affected, and can lose aid and rebates.
• Workers and benefit recipients: Anyone who irregularly combines benefits with work can lose them for months or permanently.
• The Labor and Social Security Inspectorate: It gets longer deadlines, broader access to data from other administrations and new electronic notification channels.

Words worth knowing

Responsabilidad solidaria (joint liability)

The obligation to pay another person's or company's debt if that party does not pay.

Salarios de tramitación (wages during dismissal proceedings)

Wages the company must pay a worker when a dismissal is ruled improper and the worker has not found another job.

Expediente de regulación de empleo (collective dismissal proceeding)

A procedure by which a company suspends or ends contracts for economic, technical, organizational or production reasons.

Convenio especial (special agreement)

An agreement with Social Security to keep making voluntary contributions in certain situations, such as after a collective dismissal.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries