Is the bogus self-employed a fraud?

Is the bogus self-employed a fraud?
Published on: 13 September 2022

Table of contents

False self-employed workers are currently the target of labour inspections. It is a figure that is included in the Special Regime for Self-Employed Workers (RETA) of the Social Security despite having a professional link with the company. A labour lawyer can advise you on this issue.

What is a false self-employed person?

It is a person who completely falsifies the nature of self-employment, towards the so-called economy companies favoured by the deceitful position to save social costs provided by the capitalists. In order to identify a situation of false self-employment, the criteria defining the employment relationship with the company must be met: dependence and alienation at risk.

It should be remembered that although the relationship between the bogus self-employed and the company is legally an employment relationship, it is formally established through a commercial or civil contract, which the Labour Inspectorate can declare null and void when it detects the real purpose. The relationship is an employment relationship. In a relationship of dependence, the workers perform activities within the organisation and under the direction of the employer, and are specified in a series of guidelines such as working hours, remuneration, means of production, etc... The concept of alienation at risk is that in an employment relationship, the cost of the work is borne by the employer and the result is incorporated into the company's assets and recorded as profit or loss.

What are the penalties?

The penalties for false self-employment vary according to the degree:

  • Minimum penalty: from 3,126 to 6,250 euros.
  • Medium penalty: from 6,251 to 8,000 euros.
  • Maximum penalty: from 8,001 to 10,000 euros.

In addition to obliging employers to immediately affiliate workers to the general social security scheme, the Labour Inspectorate can also demand payment of the time that workers must pay contributions under the general scheme; the contribution claimed can be the contribution for the last four years, unpaid contributions plus 100% up to 150% surcharge. Having a false self-employed person may not only constitute an employment fraud, it may even constitute a criminal offence if these expenses add up to the astronomical sum of €50,000 over the last four years.

How can this situation be reported?

There are up to four different mechanisms for filing a complaint against these situations of bogus self-employment. The most preferable option is to file a complaint with the Labour Inspectorate at the time the work is carried out, so that the employment relationship between the bogus self-employed and the company can be accredited.

  1.  Part-time employment fraud anonymous reporting email: This form does not identify the complainant, but does identify the respondent. If the authorities believe there are sufficient signs, they will conduct labour inspections.
  2.  Formal complaint to the Labour Inspectorate: Through this means, the auditor agrees whether the business relationship established is in favour of the bogus self-employed person.
  3.  Claim before the social court: In this case, the judge will declare the false self-employed status, and demand the corresponding compensation and employment from the company.
  4.  Complaint to the Social Court after dismissal: This mechanism is useful when a company terminates your services and seeks to recognise the employment relationship so that you can be compensated as if you had been dismissed.

What measures ensure affiliation of the bogus self-employed?

  • Modification of contribution rules to combat fraudulent withdrawals through the RED system.
  • Stricter sanctions
  • Strategic Plan for the Labour and Social Security Inspectorate 2021-2023.
  • Gentleman's Law.

What is a TRADE and how does it differ from a bogus self-employed person?

Once the provisions of the Self-Employment Act of 11 July 2007, including those relating to occupational schemes that are economically dependent on workers, have been recognised as an occupation, specific assumptions must be made to differentiate them from self-employment.

Employed persons use:

  • At least 75% of your income comes from the same payer (this is what makes you financially dependent).
  • Do not make employees responsible and do not subcontract some or all activities to third parties.
  • Own your own materials and infrastructure.
  • Be the one who defines how you organise your meetings and work schedules.
  • Charge according to the results agreed with the client.
  • No premises, offices or offices open to the public, nor become a partner of a third party.

Although the business relationship is the same in both cases, there are a number of differences that make the employment relationship unlawful. In the first case, one of the most reiterative, is the imposition of a working time. Traders have the right to agree their working hours and working days and holidays according to their preferences. Otherwise, they would be bogusly self-employed.

An economically dependent self-employed person has his own materials and his own means of production, as well as his own place of work. The professional is falsely self-employed when he/she is active in the company's office or using the company's computer or any other equipment provided by the employer. Traders choose what they are paid for their services or ultimately agree with the payers, just like any other self-employed person. In the case of bogus self-employment, the amount to be charged is imposed by the employer as if it were a salary.

Why is it illegal to hire bogus self-employed?

A bogus self-employed person assumes all the responsibilities that a self-employed person and an employee should have. However, he or she does not enjoy the rights that an employee should have. This represents a significant saving in social costs for the company, which is the main reason for the fraudulent nature of this practice.

A lawyer in less than 24 hours.
Lawyers - 24h A lawyer in less than 24 hours. We defend your interests
"Anywhere in Spain"

With our online appointment system you will have immediate advice without the need for face-to-face visits or travel.

One of our lawyers specialized in your area of interest will contact you to formalize an appointment and make your consultation by video call.

Available platforms

Add new comment

Do you need a lawyer in Madrid, we call you back

Fill in the form and we will call you as soon as possible.

* Required fields