Measures to prevent undeclared work by subcontractors, France
Prior to 2011, main contractors had to demand documentation from subcontractors demonstrating that they did not employ illegal workers and fulfilled their obligations to pay social security contributions. Under the new law, the subcontractors now have to provide a certificate, provided by social security bodies, to show they fulfil their legal obligations to their employees and pay social security contributions.
A national plan to fight undeclared work was adopted in 2009 for a two year period (2010–2011). The detection rate (procès-verbal) for illegal work, which numbered 8,764 in 2008, is targeted to increase by 5% annually, and the number of reassessments, to uncover employers failing to pay social security contributions, which, in monetary terms, totalled €108 million in 2008, will need to increase by 10%. The Minister of Labour also sought to increase joint investigations, between a number of inspection bodies, from 23% to 25% in 2010 and 2011.
The plan specifically focuses on five sectors: construction; hotels and restaurants; the private security and cleaning industry; live performance and recorded entertainment; and seasonal work in agriculture. It also targets four main sources of infringements: undeclared labour, hiring of undocumented migrant workers, the illegal use of a specific status of employment (internship, short-term contracts in the live performance or audiovisual sector, so-called ‘intermittents du spectacle’) and illegal trafficking of works across borders. This national plan aims to fight against a phenomenon that costs, according to data from the Ministry of Labour in 2009, €60 billion per year, equivalent to 4% of the national GDP or the entire budget of the country’s public education system.
In this area, since 2010, the government and Parliament have adopted several bills aimed at strengthening measures to identify infringements of the legal requirements to pay taxes and social security contributions. The main focus of these measures is to counter fraudulent employers who breach their statutory duty to declare accidents at work and occupational diseases, to improve the exchange of information between the various inspection bodies and to introduce a new measure whereby authorisation is given to employees of the French public employment service (Pôle Emploi) to identify infringements of the rules relating to unemployment insurance and undeclared labour.
The law n° 2011-672 of the 16 June 2011 on immigration, integration and nationality, which came into force on 2 December 2011, has increased the penalties for those employers who have committed fraud by failing to declare labour. This law transposed Directive 2009/52 of 18 June 2009 and provided minimum standards on the sanctions and measures that can be used against employers which employ illegally resident third-country nationals. This Directive prohibits the employment of illegally resident third-country nationals in order to fight illegal immigration.
The law n° 2011-672 of the 16 June 2011 on immigration, integration and nationality, which came into force on 2 December 2011, has widened the scope of potential punishments for employers working as subcontractors, found guilty of employing illegal workers. Following the same trend, law n° 2011-525 of 17 May 2011 on the simplification and improvement of the quality of law, has made it compulsory for public bodies subcontracting work to include financial penalties for subcontractors refusing to regularise the employment relationship by coming into line with the legislation on illegal work. The law of 16 June 2011 and the decree of 30 November 2011 have developed two main measures. The first requires the main contractor to be involved in the payment of wages from the subcontractor to its employees. The second strengthens the obligation of the subcontractor to provide a declaration to the main contractors.
Increase financial solidarity between the main contractor and subcontractors
The employer must pay directly to the migrant worker, within 30 days after the infringement has been proven, the salary arrears (wages, allowances etc.) and damages equal to three months’ salary for breach of the employment relationship and, where appropriate, the costs of sending back payments to the country in which the migrant left voluntarily or involuntarily. If the employer cannot pay, than the director of the French Office for Immigration and Integration (OFFI) can ask the ordering party to pay or to complete the amount paid by the employer.
Obligation of a duty of care for subcontractors
This obligation was supplemented by Decree No. 2011-1601 of 21 November 2011 relating to the content and terms of issuance of the certificate provided for in Articles L. 8222-1 and L. 8222-4 of the Labour Code and L. 243-15 of the Code of Social Security. This decree aims to improve the information available to contractors to ensure compliance with labour law by their subcontractors. It replaces the declarative certificates that subcontractors had to previously produce for their contractor with certificates relating, not only to the reporting requirements, but also the payment of contributions and social security contributions (art. L. 243 -15 of the Code of Social Security). The onus for ensuring the authenticity of the certificates is placed on the contractor.
The law contains provisions relating to the obligations and liability of the contractor, arising from the use by a subcontractor using illegal migrant workers. Now, the lack of due diligence will result in charges being levied against the contractor together with wage claims for compensation, dues and taxes tax owed by the subcontractor employing illegal workers. It is the same penalty for when a contractor has been convicted of knowingly having used the services of a subcontractor employing illegal workers. New cases of financial solidarity strengthen those previously applied to fixed contributions only and to special OFII (Articles L. 8254-2-1 8254-2-2 and L.).
Décret n° 2011-1693 du 30 novembre 2011
Arrêté du 30 novembre 2011, NOR : IOCL1131488A
Liaisons sociales, “Loi relative à l’immigration – Mesures concernant l’emploi”, Légis. soc. - n°155/2011 du 3 août 2011
Frédéric Turlan, IR Share