An introduction to social inspections
30/06/2021

The government has made the fight against social dumping and social fraud a priority, resulting in ever-increasing monitoring action from social inspectorate services. In 2020, more than 100,000 inspections were carried out by all of the social inspection services combined. As such, the question is not as much whether a company will be inspected, but when. 

Employers have insufficient insight into  social inspection plans, although these inspections usually follow the same pattern. Furthermore, inspections can often be dismissed or closed with minimal corrections or consequences. Only a minority of inspections result in prosecution. Below, we’ll summarise what to expect from a social inspection and how to make sure you’re well prepared.

Various social inspection services

Belgium has various types of social inspection services, both on a national level (e.g. the labour inspectorate and the inspectorate services of the National Social Security Office and the National Employment Office) and on a regional level (e.g. the inspectorate service of the Flemish Department of Employment and Social Economy). Therefore, employers might be faced with several social inspections executed by different inspection services. The Belgian Social Information and Investigation Service (“SIOD”/”SIRS”) coordinates and supports concerted inspections by the different social inspection services. In 2020, the SIOD carried out 10,080 concerted social inspections. 

In addition, the increasing complexity of international labour mobility requires more complex cross-border inspections. It is in this light that the European Labour Authority (ELA) was established on 31 July 2019 to coordinate and support EU Member States in their concerted and joint cross-border inspections. The ELA helps to ensure that the EU rules on labour mobility and social security coordination are enforced in a fair way.

Triggers for a social inspection

Many employers wonder why they are targeted by social inspectors. In general, there are 3 possible reasons for this:

  1. Routine examination: in principle a company will be investigated by social inspectors every 5 to 10 years; 
  2. Flash checks: these are announced checks by various inspection services, targeted at specific industries. As in previous years, there will also be flash checks  in several industries in 2021 (July- the agriculture and horticulture industry, August- the carwash industry and September- the meat-processing industry). Although the flash checks are mainly of  a preventative and informative nature, the inspection services will - if they observe any cases of non-compliance - proceed to take the necessary action, including issuing an official report;
  3. Imposed check-ups: these check-ups are ordered by the public prosecutor.

Pre-investigation with information gathering and data exchange

Every social inspection starts with information gathering. All inspectors may exchange data from their investigation with other inspectors. They may also communicate this data to other (national and international) public departments responsible for the implementation of labour law, social security law, tax law, environmental law, etc. This wealth of data, combined with advanced data mining techniques, makes it easier for inspectorate services to target companies who might be non-compliant.

Investigation

Social inspectors have very broad investigative authority. The inspectors have the right to demand access to a company’s premises, to search attendance records, to seize documents and goods and to talk to any employees who are present.

Employers and staff are obliged to cooperate with these investigations. If inspectors encounter any attempts to actively obstruct their investigations, they may draw up a formal report on obstruction to inspection and send it to the public prosecutor. In such cases, heavy penalties may be imposed. Even if the prosecutor decides not to prosecute, substantial administrative fines can still be levied.

Outcome of the investigation

When inspectors encounter infringements e.g. non-payment of the minimum wage, their first concern is to rectify the illegal situation. To this end, they prefer to make use of their discretionary powers. Rather than informing the court of any infringements via a formal report, they may issue the employer with a warning or propose a deadline by which the employer, in our example, must pay the wages due in arrears (a so-called regularisation). The social inspector will monitor the ongoing regularisation, by systematically asking for items such as proof of payment for the outstanding wages and pay slips. 

If the employer remains negligent and does not follow up the social inspector's demand for regularisation or if they commit serious and/or repeated violations, a formal report will be drawn up and transmitted to the public prosecutor. This may lead to criminal penalties or administrative fines, which can be multiplied by the number of employees involved, up to a maximum of 100 employees:

Penalty level Imprisonment Criminal fine Administrative fine

 

Penalty level Imprisonment Criminal fine Administrative fine

Level 1

E.g. not including the names of the works council members in work regulations

/ / EUR 80 - 800

Level 2

E.g. non-compliance with rules regarding working time

/

either EUR 400 - 4,000

or EUR 200 - 2,000

Level 3

E.g. infringements relating to the health and safety of workers

/

either EUR 800 - 8,000

or EUR 400 - 4,000

Level 4

E.g.  undeclared work

either 6 months - 3 years

and/or EUR 4,800 - 48,000

Legal Entity: EUR 24,000 - 576,000

or EUR 2,400 - 24,000
 

 

Other criminal penalties are possible for sanction level 3 and 4: prohibition of exploitation, prohibition of profession and shutting down of business, if explicitly provided for by law.

Timeline of civil claims

Understandably so, most employers mainly focus on the social inspection itself, however, they must also keep in mind that, following a social inspection, a civil claim can be pursued by an employee or the social security authorities.

Quick checklist

In order for employers to be as well-prepared as possible for a social inspection, it’s important that they take the following elements into account:

General preparations:

  • prepare inventory of social documents;
  • identify possible pitfalls (e.g. benefits in kind, sham self employment);
  • appoint an SPOC (Single Point Of Contact);
  • organise a mock audit;
  • consult SIOD checklists (e.g. the COVID checklist);
  • stay alert in case of flash checks.
  • Preparations for an announced social inspection:
  • ask to re-arrange an appointment if it is not convenient;
  • arrange for a professional to review all of the documents you gathered;
  • make sure the SPOC guides the investigation;
  • respect any deadlines indicated by the inspector.
  • Preparations for an unannounced social inspection:
  • request a copy of the inspector’s ID;
  • contact the SPOC and attorney specialised in employment law;
  • ask the inspector to wait until the attorney arrives;
  • remember to remain friendly.

Book launch - “Sociale inspectie - van eerste inlichtingen tot gerechtelijke vervolging”

If you have any questions about any of the information above, don’t hesitate to contact us. We’d also like to recommend the book ‘Sociale inspectie - van eerste inlichtingen tot gerechtelijke vervolging’. Co-authored by PwC Legal's Bart Elias and Stefanie Van de Perre, this is a practical guide for legal professionals on social inspections in Belgium. As the title indicates, it covers all aspects of a social inspection, from initial information gathering right up to  outcome, be it for regularisation, amicable settlement or criminal proceedings.

This 410-page book contains a glossary of terms, giving you quick and easy access to the topics most relevant to you. A carefully curated and well-balanced selection of references to case-law and legal doctrine make this book essential reading for effective research work. And on a practical note, it contains handy checklists to help you prepare for a social inspection. Order your copy here!

Voir aussi : PwC Legal

[+ http://www.pwclegal.be]


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