Illegal employment, in its various forms, is a punishable offence under French law. Employers and principals need to be aware of the financial, administrative and criminal risks incurred in the event of an inspection or conviction. This article provides an overview of the practices considered as illegal employment and the associated penalties.

1. What practices are considered illegal employment?

Illegal employment covers a number of offenses, including the following:

1.1 Concealed work

– Concealment of salaried employment:

Example: You fail to declare an employee or the actual number of hours worked.

– Concealment of activity:

Example: You carry on an activity without being registered with the Trade and Companies Register (RCS) or the National Companies Register (RNE).

1.2 Employing foreign nationals without a work permit

Employing foreign workers without the necessary authorizations (visa, residence permit, work permit).

1.3. Illegal loan of labor and bargaining

– Illegal labour lending: Making employees available for commercial gain, without respecting their rights.

– Marchandage: Illegal provision of labor, with infringement of employees’ rights.

1.4. Irregular accumulation of jobs

Example: An employee exceeds the legal maximum working hours.

1.5. False déclarations

Example: Declare a fictitious activity to receive replacement income (unemployment, retirement, disability).

2. What are the administrative penalties?

Employers inspected for illegal employment risk a number of administrative sanctions, including

– Withdrawal of public subsidies (exemption from social security contributions, recruitment subsidies) for up to 5 years.

– Repayment of public subsidies received over the past 12 months.

– Exclusion from public contracts for a maximum of 6 months.

– Administrative closure of the establishment for a maximum of 3 months, decided by the prefect, with confiscation of professional equipment.

In the event of a repeat offence

If a repeat offence occurs within 5 years, a financial penalty may be imposed. This penalty corresponds to all the reductions or exemptions from social security contributions from which the employer benefited for its employees during the period in question.

3. Adjustment of social security contributions

In the event of undeclared work, the employer must pay the social security contributions due, with a lump-sum surcharge.

Lump-sum assessment amounts

– Lump-sum basis: €11,592, with a 25% surcharge.

– Aggravated cases (minors, organized gangs, vulnerable persons) : Flat-rate base: €18,547, with a 40% surcharge.

Reduction in surcharge

A reduction of 10 points is granted if the employer pays the adjustment within one month of the formal notice, or submits an accepted payment schedule within 30 days.

In the event of a repeat offence

If the employer re-offends within 5 years :

– 45% surcharge if the previous surcharge was 25%.

– 60% surcharge if the previous surcharge was 40%.

4. What are the penal sanctions?

In the event of conviction by a criminal court, the following penalties may be imposed:

Fines and imprisonment

– Concealed work: up to 3 years’ imprisonment and a €45,000 fine for an individual (€225,000 for a company).

– Aggravated cases (minor, vulnerable person, organized gang): Up to 5 years’ imprisonment and €75,000 fine (€375,000 for a company).

– Illegal lending of labor or bargaining: up to 2 years’ imprisonment and a €30,000 fine (€150,000 for a company).

– Employment of a foreigner without a work permit :

– Up to 5 years’ imprisonment and €15,000 fine per employee concerned (€75,000 for a company).

– In the case of an organized gang: up to 10 years’ imprisonment and a €100,000 fine (€500,000 for a company).

Additional penalties

– Prohibition from engaging in professional activities for up to 5 years.

– Exclusion from public contracts for up to 5 years.

– Confiscation of professional equipment or objects produced as a result of illegal employment.

– Publication of conviction: Posting in the press or on the Ministry of Labor website, for a maximum of 2 years.

5. Why respect the rules?

Over and above the legal risks, illegal employment affects :

– The company’s image: A public conviction can damage the employer’s reputation.

– The employees concerned: Their rights are violated (lack of social protection, increased risk of exploitation).

– Company finances: Administrative and penal sanctions, as well as tax adjustments, can have major financial consequences.

Conclusion

Compliance with employment regulations is essential to ensure the long-term viability of the company and the protection of employees’ rights. Penalties for illegal employment are severe, and can have a serious impact on the employer’s business.

Do you need support in securing your HR practices?

FB Avocat is at your side to advise you on your legal obligations and prevent employment-related risks.

– Head office : Bordeaux

– Sub-office: Paris

– Telephone: 09 85 40 18 64

– E-mail: contact@legal-fbavocat.fr

– Website: www.fb-avocat.net

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