Undeclared work: consequences and how to report it

What we colloquially know as undeclared work is an illegal employment situation that consists of working without a contract and without being registered with the Social Security. The agreement is usually made verbally and an undeclared money salary is agreed upon.

However, there are neither pay slips in the case of employment nor invoices if you are self-employed.

In this way, the employer has no legal obligation to the employee and saves the corresponding costs of the health and tax authorities. 

Consequences of undeclared work in Spain

Undeclared work is an illegal practice which has administrative consequences: penalties of up to 10,000 euros by Social Security, reimbursement of amounts received and a penalty for receiving future benefits. But it can also entail criminal liabilities depending on the entity and seriousness of the fraud.

What does it mean to work in the black economy?

In this situation, the worker is totally unprotected because he/she is not registered with the Social Security and this implies that:

• You are not entitled to unemployment benefit.
• You are not entitled to severance pay.
• Holiday entitlement is not recognised.
• In the event of an accident at work, there is no entitlement to benefits.
• It cannot claim any of its obligations, such as non-payment or late payment of wages, from the employer.

What can I do if my employer does not register me with the Social Security?

Any company that hires a person is obliged to conclude an employment contract and to register the worker with the Social Security system. Otherwise, you will be breaking the law, violating the rights of the worker and defrauding the social security system and the tax authorities.

In general, the worker is aware of his or her conditions but is sometimes unaware that he or she is not registered in the system until he or she makes an enquiry or an accident at work, for example.

How to report undeclared work

That is why, It is important to make sure that workers' rights and obligations are met and complain to the company immediately to solve the problem in case of error or fraud.

• If the company decides to ignore the requestWe recommend that you leave a formal record and send the company a request via burofax to regularise your situation, warning that the next step will be to report the facts to the Labour Inspectorate.

• If the situation persistsIn order to do so, we must collect the documents and evidence that prove the existence of the employment relationship and report to the Labour Inspectorate that we are working under the black economy, with a salary in "b" and without being registered with the Social Security.

The Inspectorate will initiate administrative proceedings to clarify the facts, regularise the worker's situation and impose sanctions on the company, if necessary.

Undeclared work - Abogados Laboralistas Málaga

If you want to start the procedure to report this situation and you need legal advice with a lawyer specialised in labour law, from Ódice Abogados, a law firm in Malaga, we are at your complete disposal to help you in everything we can.

Contact with us for more information or to request any of our services.

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