Olivier Audino
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The search for better performance and the desire to focus on their core business sometimes lead companies to outsource some of their activities. You should know that this choice can be risky today, because your company is now punishable against hidden work from your subcontractor. “Fraudulent is stealing. Whoever who fraud will be punished”, this is the new motto of URSSAF, which has already recovered 108 million euros following 9,000 checks on illegal work. Now, the presentation of a Vigilance certificate is mandatory for all subcontractors to avoid sanctions.
How can we protect ourselves from irregularities by our suppliers? What new obligations does the latest decree impose?
The Concealed work is a crime characterized by the intentional concealment of an activity carried out independently. It also covers the partial or total concealment of paid employment. Is considered to be a form of hidden work the falsification of certain elements relating to the hiring or remuneration of an employee, such as the concealment of the number of hours actually worked, the absence of a pay slip or declaration prior to hiring, etc.
These offenses are punishable by law according to article L. 8221-1 of the Labor Code. The latter prohibits the act of soliciting, directly or through intermediation, the services of a person who does hidden work, either because it carries out the activity itself and evades its reporting obligations, or because it employs undeclared or under-declared employees. It is also forbidden to carry out any form of advertising aimed at promoting hidden work. All of this may result in prosecutions and convictions under the hidden work sanctions.
As in any form of fraud, the hidden work is subject to administrative, criminal or disciplinary sanctions in addition to the payment of outstanding fees, interest on arrears and the reimbursement of overpayments. More specifically, the crime of hidden work exposes its author to a term of imprisonment of 3 years and to a fine of €45,000 and €225,000 for legal persons. This penalty may increase to 5 years if it is an illegal employment of foreign companies and €500,000 in the event of posting fraud. These convictions can endanger the life of the company.
Other additional penalties may be added, such as a ban on practising, the exclusion from public contracts or the loss of exemptions and reductions in charges.
Since 2011, the law on hidden work has been strengthened. The decree of 21 November 2011 improves the provisions relating to the fight against illegal work. The State is now partly handing over the responsibility for controlling hidden work and the obligations of the subcontractor on purchasers. Thus, in addition to the offender himself, his client may also be sanctioned if it is established that he knew that he was using a person who exercises a hidden work.
The constraints for your company are so important that the sanctions in case of non-compliance with this decree are dissuasive.
In the context of a contract of at least 3,000 euros per year, you, as the client, must ensure, every six months and until the end of the contract, that your subcontractor pays:
To do this, you must require your subcontractor to present a URSSAF vigilance certificate valid in addition to the document attesting to its registration (Kbis). This certificate must mention the number of people employed by the subcontractor and declared during the last deadline.
ATTENTION, to be compliant it is imperative that you ensure the authenticity of The vigilance certificate. The document provided by your subcontractor includes a security code that you are responsible for verifying with the social security contribution collection body.
The subcontractor must give you theUrssaf vigilance certificate at the time the contract is signed and then every 6 months until the contract is over. If he does not do so, you must refrain from signing the contract or continuing the partnership, otherwise you will be sanctioned and jointly and severally liable to pay the taxes, duties or social security contributions due by the subcontractor.
Note that the ordering party must no longer be content with receiving vigilance certificates. It must also verify the accuracy and authenticity of the information they contain. He must also ensure that the information mentioned on the document matches the information he has in his possession concerning his subcontractor. A company was sanctioned because the documents that the subcontractor gave it were in the name of a company other than the one on the contract.
Finally, it must verify the subcontractor's ability to carry out the work agreed in the contract. He must check whether he can get by financially by checking the number of employees and the amount of remuneration shown on The vigilance certificate.
The hidden work represents a significant loss of revenue for the State, more precisely for the funds of the URSSAF and social organizations. A report by the Court of Auditors published in 2010 estimated the deficit due to illegal work at around 10 to 15 billion euros per year, or half of the Social Security deficit. This figure concerns both the shortfalls relating to social benefits for individuals and to social security contributions from employers.
Faced with the magnitude of the loss, the fight against fraud has once again become a major priority for URSSAF and Social Security. A great deal of effort has been made in this direction. Among them, we can mention the strengthening of sanctions.
Fraud relating to family benefits or Old Age Insurance is, for example, punishable by an administrative penalty of up to four times the Social Security ceiling (€11,784 in 2011). In addition, criminal sanctions include prison sentences and fines.
The efforts made it possible to pronounce more than 700 convictions due to health insurance fraud between 2008 and 2010. Sentences represent an average of 7 months of unconditional or suspended imprisonment.
“Fraudulent is stealing, whoever fraud will be punished”, this is the slogan of the communication campaign carried out as part of the fight against fraud, including the hidden work or illegal. This campaign was relaunched by the State in partnership with the Ministry of Budget, the ACOSS, the CAF, the CNAMTS and the CNAVTS. Its objective is to make French people aware of the challenges of social and fiscal fraud and to strengthen the sanctions provided for by law in case of fraud.
If, despite all his vigilance, a contractor is informed of the presence of a hidden worker or of an irregular situation specific to hidden work, he must order his subcontractor to regularize his situation immediately.
The subcontractor must then inform the client in writing of the measures taken to put an end to the irregularity. A copy of the letter should be sent to the administration. If the subcontractor does not respond within 15 days, the contractor must inform the administration of the situation. If he does not do so, he may be ordered to pay a fine of €1,500 and be jointly and severally liable to pay the remuneration and allowances of the employee as well as the corresponding social security contributions. The fine will be doubled in the event of a repeat offence.
The vigilance certificate is a document issued by the URSSAF, attesting that a person or company is in good standing with its social obligations. It replaces the public procurement certificate. As mentioned above, the objective of this document is to fight against hidden work and other forms of social and fiscal fraud. It therefore makes it possible to prevent a subcontractor from employing hidden workers or being a hidden worker himself. The document must mention the identification of the company, including its legal name, siret number, address, etc. It must also mention that the employer is up to date with its social security contributions for at least the last 6 months.
If the subcontractor employs employees, the vigilance certificate must indicate the number of employees and the total amount of the declarations appearing on its last URSSAF slip.
The request forVigilance certificate must be done by the subcontractor. The latter must request it online. He also receives it online. The subcontractor must deliver it to the client upon conclusion of the contract, and then every 6 months until the contract is terminated.
Here are the different types of contracts that are subject to the obligation to present a Vigilance certificate to avoid sanctions relating to hidden work : supply of services, contract for the performance of a job (contract for manufacturing, processing, repair, construction, intellectual or artistic works, industrial subcontracting or works...), carrying out a commercial act...
The vigilance certificate may be issued in the following cases:
Note that if the applicant has been fined for hidden work with the Public Prosecutor, he will not be able to receive his Vigilance certificate. On the other hand, if he paid his contributions following the fine, a Vigilance certificate can still be delivered to him.
Self-employed workers at the beginning of their activity cannot obtain a Vigilance certificate. Instead, they will receive a temporary certificate. Obtaining the latter is subject to the completion of a declaration of activity and formalities for setting up a business.
It may happen that the issuance of a Certificate of vigilance be refused by URSSAF in the following two cases:
The subcontractor must then contact Urssaf to quickly regularize his situation and obtain his Vigilance certificate.
It is the subcontractor who must apply to Urssaf to obtain its Vigilance certificate following the request of the client. To receive this document, he must be up to date with his social security contributions and declarations. The request requires you to tele-enter the information on the Urssaf website. Each declarant has their own secure space on the organization's website. He must connect to it in order to retrieve and print the receipts of payments and declarations he has made.
He must then present this Vigilance certificate to its client. The latter has the obligation to verify the accuracy and authenticity of the information contained in it. To do this, he just has to connect to the Urssaf website and enter the security number mentioned on the home page. If the client fails to comply with his obligations of vigilance, he is liable to sanctions for complicity in hidden work.
La validity of a vigilance certificate is 6 months. If the contract is not yet fulfilled at the end of this period, it is up to both parties to renew their respective obligations.
The + Vigilegal.com
The Vigilegal.com portal automates the collection of Vigilance certificates with your suppliers. You save precious time and stay compliant with the law easily!
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