What is the risk of a company in the event of illegal work?

Verified 03 July 2026 - Entreprendre Service Public / (Prime Minister)

All work performed by an employer or its employees must be declared. In the absence of a declaration, or in the case of an incomplete declaration, the activity is considered illegal. It is then called « black » work, or hidden work. Controls may result in financial, administrative and criminal penalties. If subcontracting is used, the company shall be liable for illegal work carried out by its subcontractors. We present you the rules to know.

Concealed work is the most common offense, but several situations can constitute illegal work:

  • Total or partial concealment of paid employment (e.g. declaration of an employee, non-declaration of actual hours worked): this is work concealed by concealment of salaried employment.
  • Failure to report an activity (e.g. lack of registration in RCS: titleContent or at RNE: titleContent): this is work concealed by concealment of activity.
  • Provision of employees in order to make a profit: this corresponds to a loan of labor (or bargaining) illegal.
  • Cumulation of jobs not complying with the cumulation rules (e.g. exceeding the maximum number of hours allowed).
  • Use of foreigner workers which have no work permit (visa, residence card, etc.).
  • False declaration to obtain replacement income (partial activity, retirement, disability, etc.).

Please note

In very exceptional cases, the performance of the work, although carried out outside the legal framework, is not penalized, if it concerns works that must be carried out in an emergency (risk of imminent accident or need to bring aid to persons).

In the same situations, a subcontractor may also be in an illegal work situation.

In order to prevent illegal work, the company must ensure, inter alia:

  • Declare your activity, by requesting its registration at RCS: titleContent or at RNE: titleContent
  • Declare each hiring, through the DPAE: titleContent
  • Establish an employment contract for each employee
  • Register each employee at single register of staff
  • Verify that the foreigner workers have a valid residence permit and work permit
  • Monitor the compliance of subcontractors (attestation of vigilance).

The fight against illegal work is based on an extensive control system. Many services and bodies have specific powers to detect, detect and punish such infringements:

  • Inspection officerslabor inspection
  • Officers and judicial police officers
  • Tax and Customs Officers
  • Staff of social security bodies (Urssaf: titleContent, MSA)
  • Maritime Affairs, Civil Aviation and Land Transport Control Officers
  • Agents of France Travail
  • Agents of the CNAPS: titleContent.

The powers of officials competent to investigate and establish offenses relating to illegal work are broad. They may in particular:

  • Access accounting or business documents
  • Obtain disclosure of relevant documents, information or information, even where they are usually subject to solicitor-client privilege.
  • Act under pseudonym.

Offenses constituting illegal work shall be established by means of minutes.

Controls can lead to administrative penalties immediate, to financial penalties and to criminal prosecution.

Adjustment of contributions

Failure to comply with the prohibitions on concealed work leads to an adjustment of social security contributions. The adjustment consists in paying the social contributions that should have been paid, with the application of an increase.

The adjustment shall be calculated on a flat-rate basis, fixed at 25% from PAS: titleContent.

For 2026, this flat-rate basis is equal to €12,015.

Please note

If the employer can provide actual data on the hidden remuneration paid to employees, then the adjustment applies to those actual data.

The amount of the adjustment of contributions shall be increased by a different rate depending on the date on which the proceedings are initiated.

Proceedings commenced from 1 June 2026

The amount of contributions shall be increased by:

  • 35% in the event of a finding of the offense of concealed employment by concealment of activity or employment
  • 50% if the illegal work involves one of the following (aggravating circumstances):
    • Several people are employed
    • A minor is employed when he should be in school
    • A person is vulnerable or dependent
    • The offense is committed in organized gang.

The adjustment covers all social contributions and contributions, except unemployment insurance.

A maximum of 5 years is allowed to pay for the adjustment.

This mark-up rate may be reduced by 10 points if the company settles the adjustment within one month following the formal notice, or if it presentswithin the same period, a payment scheduleaccepted by the collection agency.

In case of recurrence within 5 years of a first adjustment, the increase shall be increased to:

  • 45% if the mark-up on 1er turnaround was 35%
  • 60% if the mark-up on 1er turnaround was 50%.
Proceedings commenced on or after a date fixed by decree (January 1, 2027 at the latest)

The amount of contributions shall be increased by:

  • 35% in the event of a finding of the offense of concealed employment by concealment of activity or employment
  • 50% if the illegal work involves one of the following (aggravating circumstances):
    • Several people are employed
    • A minor is employed when he should be in school
    • A person is vulnerable or dependent
  • 60% if the offense is committed in organized gang.

The adjustment covers all social contributions and contributions, except unemployment insurance.

A maximum of 5 years is allowed to pay for the adjustment.

This mark-up rate may be reduced by 20 points if the company settles the adjustment within one month following the formal notice, or if it presentswithin the same period, a payment scheduleaccepted by the collection agency.

In case of recurrence within 5 years of a first adjustment, the increase shall be increased to:

  • 45% if the mark-up on 1er turnaround was 35%
  • 60% if the mark-up on 1er turnaround was 50%
  • 70% if the mark-up on 1er turnaround was 60%.

Please note

By the 1ster January 2027, a minutes of social flagrance may be established by a control officer. This mechanism will enable the Urssaf to take immediate precautionary measures in the event of concealed work, and to return the constraint enforceable, even if the debtor makes an appeal.

Administrative penalties

In the event of a review, administrative sanctions may also be imposed, in addition to possible criminal sanctions in the event of legal proceedings:

  • Abolition of State aid (e.g. exemptions from social security contributions or aid for hiring an apprenticeship contract) for up to 5 years
  • Repayment of public aid already collected over the last 12 months
  • Exclusion of public contracts for a maximum period of 6 months
  • Closure of 3 months maximum decided by the prefect with confiscation of professional equipment.

Warning  

In case of recurrence during the Last 5 years, a financial penalty is imposed on the principal. Its amount shall be equal to all the reductions or exemptions from contributions or contributions which it has received for the remuneration paid to all its employees over the period in which the hidden work situation was established.

Penalties of fines and imprisonment

In the event of conviction, the criminal court pronunciation of criminal sanctions.

The person convicted shall be punished by a fine and/or imprisonment.

  • The perpetrator of the offense of concealed work risk of up to 3 years' imprisonment and €45,000 fine (€225,000 if it is a business).
  • The loan of labor illegal and the bargaining shall be punished by 2 years' imprisonment and €30,000 fine (€150,000 for a business).
  •  THEemployment of a foreigner without a work permit shall be liable to a term of imprisonment of 5 years and €30,000 fine per person (€150,000 for a business).

These penalties are strengthened in case of aggravating circumstances :

  • If the concealed work concerns a minor or a vulnerable or dependent person, the penalty is up to 5 years' imprisonment and €75,000 of fine.
  • If the concealed labor is committed in an organized gang, the penalty is 10 years' imprisonment and €100,000 of fine.
  • If the illegal labor loan and bargaining are committed in an organized gang, the penalty shall be 10 years' imprisonment and €100,000 of fine.
  • If the employment of a foreigner without a work permit is committed in an organized gang, the penalty shall be 10 years' imprisonment and €200,000 of fine.

Supplementary penalties

In some cases, one or more additional penalties may be pronounced:

  • Prohibition of professional activity for up to 5 years
  • Exclusion from public procurement for up to 5 years
  • Confiscation of objects produced in the context of illegal work, or of professional equipment that allowed production
  • Viewing judgment in journals
  • Dissemination of the judicial decision (criminal decision) in a blacklist on the website of the ministry of labor. The maximum duration of the broadcast is 2 years.
  • Prohibition of civil rights (e.g. voting rights) and civil rights (displacement, kinship, marriage, inheritance, etc.).

In order to prevent illegal work, special supervision is required in the event of outsourcing.

Types of illegal acts

In the case of subcontracting, a subcontractor is in an illegal employment situation in the following cases:

  • Total or partial concealment of paid employment (e.g. declaration of an employee, non-declaration of actual hours worked): this is work concealed by concealment of salaried employment
  • Failure to report an activity (e.g. lack of registration in RCS: titleContent or at RNE: titleContent): this is work concealed by concealment of activity
  • Provision of employees in order to make a profit: this corresponds to a loan of labor (or bargaining) illegal
  • Cumulation of jobs not complying with the cumulation rules (e.g. exceeding the maximum number of hours allowed)
  • Use of foreigner workers which have no work permit (visa, residence card, etc.)
  • False declaration to obtain replacement income (partial activity, retirement, disability, etc.).

Duty of vigilance

The contracting authority and principals must comply with a duty of care in respect of the companies with whom they conclude a service contract. This duty of care requires regular verification of mandatory documents (proof of registration, social declarations) proving the contractor's situation. Its purpose is to ensure that the subcontractor complies with the prohibition of concealed work, the use of foreigner workers without a work permit, etc.

This duty of care which is imposed on the subcontractor when the contract is greater than €5,000 HT, consists in particular in requiring proof of its declarations of activity. One attestation of vigilance must be requested at the time of conclusion and every 6 months until the end of the contract. This document attests to the regularity of the declarations of activity and employment of employees.

FYI  

Until then, the contracting authority has not been bound by an obligation of vigilance vis-à-vis the subcontractor of its other contractor. However, new measures will impose a duty of care on the contracting authority with regard to all subcontractors involved in the performance of the contract. Thus, in the case of subcontracting chains or so-called « cascading » subcontracting, the duty of care will apply not only with respect to 1er first direct subcontractor, but also with respect to all subcontractors which intervene and which the developer has accepted. The duty of care will involve periodic verification, by the contracting authority to the main contractor, of documents relating to the regularity of the cascading subcontracting situation. These new obligations will apply on a date to be set by an upcoming Order in Council, and no later than December 27, 2026.

Financial solidarity

In the event of illegal work by a subcontractor, the contracting authority or principal shall be liable to the same penalties as if he had committed the infringement himself.

It is held jointly and severally, with the perpetrator of the offense of concealed work, payment of taxes, contributions, increases, penalties, etc.

FYI  

In the case of subcontracting chains or so-called « cascading » subcontractingand breach of the concealed work of one of the subcontractors, the contracting authority or principal shall be financially jointly and severally liable with the fined company, even if he is not the direct contracting party. However, the premium increase will not apply if the amounts are paid within a short period (which must be fixed by decree) or if a deferral plan is concluded within the same period.

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