Voluntary registration of unregistered workers and fight against undeclared work

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1. Employers who have workers without Social Security registration can register them voluntarily until July 31, 2011. If they do, they face no administrative fines for those situations and can defer their Social Security debts under certain conditions.
2. Employers who join the regularization process must sign an employment contract with the worker, under any type of contract. Temporary or fixed-term contracts must have an initial duration of at least six months, and the contract must state that it falls under this process.
3. Once the regularization period ends, companies that contract or subcontract work or services related to their own activity, or provided on a continuing basis at their workplaces, must check before the work starts that the contractor's or subcontractor's workers are registered with Social Security. Failing to make this check becomes a serious offense.
4. Fines increase for failing to register workers and for obstructing labor inspections in this area: serious offenses can reach €10,000 and very serious offenses €187,515. Companies fined for these behaviors can be excluded from employment program benefits for up to two years, and those sanctioned with the serious offense in Article 22.2 are banned from contracting with public administrations.
5. If an employer joins the regularization without meeting the requirements, or fires the worker before six months, it loses the benefits of the process, must return any aid received and pay the Social Security contributions. The Government will evaluate the results of the law after six months, after hearing the Tripartite Advisory Commission of the Labor and Social Security Inspectorate.
6. The income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPFIRPF Impuesto sobre la Renta de las Personas Físicas: Spain's personal income tax, paid by individuals on their income.) deduction for home improvement works is expanded: it is no longer limited to the main residence, the income limit rises from €53,007.20 to €71,007.20 per year, the percentage goes from 10 to 20 percent, and the maximum annual base from €4,000 to €6,750. It applies to works carried out until December 31, 2012.

Who it affects

• Employers with workers not registered with Social Security: They can regularize their situation until July 31, 2011 without fines, with a contract and possible deferral of debts.
• Workers in undeclared employment: They can obtain Social Security registration and an employment contract through their employer's voluntary regularization.
• Companies that contract or subcontract work or services: They must verify before starting the work that the contractor's workers are registered with Social Security.
• Income tax (IRPF) taxpayers who improve homes they own: They can apply an expanded 20 percent deduction until December 31, 2012, with new income and amount limits.
• Companies sanctioned for undeclared employment: They can be excluded from employment aid and banned from contracting with public administrations.

Words worth knowing

Economía sumergida

The underground economy: economic activity and work not declared to the authorities, such as workers without Social Security registration.

Regularización

Regularization: putting an irregular situation in order, here registering and hiring workers who were working undeclared.

Subcontratación

Subcontracting: when a company hires another company to carry out works or services.

Base imponible

Tax base: under IRPF, the amount on which the tax is calculated, that is, declared income.

IRPF

Impuesto sobre la Renta de las Personas Físicas: Spain's personal income tax, paid by individuals on their income.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

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