When an employer hires an employee without having them sign an employment contract or even making a declaration to administrative entities, this is considered undeclared work or grey work. There is also the fact that the employer omits the mention of overtime hours on the employee’s payslip. So this is truly a case of deliberate concealment by the employer.
What is undeclared work?
Indeed, the labor code defines undeclared work as an act contrary to labor and social security legislation. Moreover, it is an action strictly prohibited by the penal code. This concerns Article L 8221-5 which states that concealment is an offense punishable by law when the number of hours worked exceeds the number of hours declared.
This also applies to jobs where employees do not have a payslip and in cases where the employee is not declared to collection agencies, even when these agencies are not declared prior to hiring. This is therefore an act of fraud provided for by the social security code.
How to act and report undeclared work?
To report that you know there is hidden work in the primary or tertiary sector, you must report the person who employs or the company itself that does not declare its employees. We are talking about the fact that you see them working illegally.
First of all, here are the organizations you can contact:
- The labor inspectorate near the company
- The tax center located near the company or in the municipality where the company is located. This will allow them to verify the declarations.
- The police, in case the undeclared work poses a danger to the employee.
Be careful not to omit important information such as the employer’s contact details, the employee’s position, the company’s headquarters, the position held, and finally, the identity of the position.
Thus, if you have been a victim of concealment or fraud, you can also refer the matter to the labor courts online. That is, you will establish initial contact to initiate a formal notice procedure against your employer.
There is also the fact that URSSAF will attempt to control the company to ensure it complies with the charter published in the official journal on March 17, 2019.
What are the risks for the employer or employee for undeclared work?
What are the risks for the employer?
Indeed, undeclared work is classified as an offense punishable by the penal code and the civil code.
And regardless of the legal status of the company involved, it risks paying social contributions and charges. This amounts to 25% of the social security ceiling.
The employer faces the possibility of paying a fine of 45,000 euros, which could even rise to 225,000 euros, in addition to the dissolution or closure of the company. It is even possible that the employer may be denied the right to practice, whether temporarily or permanently.
It will be up to the court to decide on this measure against the employer depending on the offense.
What are the risks for the employee?
Indeed, the employee is considered by law as a victim, so they are not held responsible because they suffer exactly what their employer decides.
There are obviously risks to which the employee is exposed, that is to say work accidents, unforeseen events, and unfair dismissal.
And the fact that there is no employment contract does not allow the employee to benefit from social security coverage, or even a mutual insurance. This employee will not even be entitled to compensation when dismissed.
And worse still, in the event that the employee has received unemployment benefits or an activity bonus or RSA in addition to their undeclared work, they will be legally required to repay the amount received.
Techniques to report undeclared work
It is therefore possible for you to anonymously report to the competent authorities your employer or the company employing an undeclared employee or a company that has clandestine work performed by an employee. These are the relevant entities: URSSAF, the prudential council, and the police.
Moreover, it is preferable that you contact the authorities without being anonymous because you must remain reachable in case the competent authorities need more information than what you have provided.
Anyone, provided they are a citizen, can send a registered letter or directly inform the competent authorities. That is to say, it is possible to contact the tax office near the company’s headquarters and more precisely, you can call upon:
- Tax service inspectors
- Labor inspection located in the municipality of the company
- URSSAF of the city of the company
To report undeclared work, it is also possible to send a registered letter directly to the prefect of the department where the company is located.
So what procedures should be followed?
First of all, the safest way is to send a letter to the URSSAF inspectors. This organization has now made the fight against undeclared work an absolute priority under the supervision of the State. That is why this body periodically carries out inspections within each company.
Thus, to ensure that URSSAF follows up on your denunciation letter, you must add evidence such as photocopies to avoid being accused of defamation.
But the problem, on the other hand, is the difficulty in obtaining evidence because accusing an employer or a company of practicing undeclared work is not valid if it is merely a suspicion. And this suspicion does not even allow URSSAF to take control measures within the company. Moreover, if there is a proven and established fault, the employer risks heavy sanctions.
So what are the sanctions for the company or employer?
For an employer who employs an undeclared worker, concealed work can expose them to 3 years imprisonment in addition to a fine of 45,000 euros.
In addition, depending on the conditions, there may be a prohibition to operate, meaning the establishment could simply be closed in case of repeat offense. This is stipulated in article L362-3 of the labor code.
The employer will also be legally required to pay 6 months’ salary to the undeclared employee; this is actually a lump sum.
And for the worker, they will not be prosecuted nor held responsible for the hidden work, and the fine may increase if the person is a beneficiary of RSA.
