Inspection activities in Companies priority actions and labour sanctions

Last August 2021, the Ministry of Labour and Economy published the Strategic Plan of the Labour and Social Security Inspection for the next three years. This plan establishes a total of twelve strategic objectives through the reinforcement of the inspection activity to contribute to the improvement of the quality of employment, the guarantee of the workers' rights and the fight against precariousness and fraud in labour and social security matters.

Previously, on July 10, Law 10/2021 of 9th July of remote work was published, which modifies Article 40 of the Law on Infringements and Penalties in the Labour Order, which implies a 20% increase in the amounts of labour penalties as from next October 1, 2021.

In relation to the above, this document aims to emphasize those aspects and practices that are most relevant in the day-to-day life of many companies, in which the Labour Inspectors will intensify their investigations and its efforts to achieve the goals and objectives set out in the aforementioned Plan. 

In particular, the following campaigns and priority actions have been established:

• (i) Transforming temporary contracts into indefinite contracts in service companies and in companies with high rates of temporary employment. Besides, the concurrence of real causes in long-term temporary contracts and short-term contracts for young people will be assessed;
• (ii) Verify if the contract modalities have been fraudulently used, such as seasonal and training contracts;
• (iii) Identify fraudulent behaviours in Temporary Employment Agencies;
• (iv) Detect the precarious working conditions of workers in service companies whose contracts are covered by inter-company contracts;
• (v) Ensure compliance with occupational risk prevention regulations in companies that use remote working in a greater extent and in those activities in which psychosocial risks are more frequent;
• (vi) Identify mailbox companies based in Spain and operating in other EU countries (and vice versa), as well as transnational fraud to avoid complying with Social Security obligations in Spain in the construction sector and companies engaged in international transport;
• (vii) Derive jointly and severally and/or subsidiarily liabilities, towards the main companies that subcontract works and services to companies with Social Security debts;
• (viii) Verify decent work for people with disabilities in special employment centres; 
• (ix) Detect deficiencies in Social Security contributions and undeclared employment; and
• (x) Fight against fraud in the use of suspension and reduction of working hours by Covid-19 for improper exemption from Social Security contributions.

In addition, apart from the specific campaigns programmed, the following the actions have been planned within the framework of the objectives that we consider most relevant for the day-to-day companies´ practices (out of the total of twelve objectives set out in the Plan). In this summary we have included the potential financial fines (in the amounts in force as of October 1, 2021) that companies may face in the event that Labour Inspectors detect irregularities: