The Spanish Parliament has recently passed a series of laws to combat fraud in various areas, including tax, employment and Social Security. These laws include Law 7/2012 of October 29, amending the legal framework for tax and budget law and adapting the finance regulations to promote prevention actions against fraud; Law 13/2012 of December 26, against irregular employment and Social Security fraud; and Organic Law 7/2012 of December 27, amending the Spanish Criminal Code with respect to transparency matters and against tax and Social Security fraud.
From a Social Security standpoint, criminal and administrative measures have been adopted to combat fraud. Regarding crimes against Social Security (sanctioned by an imprisonment from one to five years and a fine of up to six times the amount defrauded), the amount at which a criminal offence is deemed to have been committed (basic offence) has been reduced from the current general total of €120,000 defrauded amount during a calendar year, to a total of €50,000 defrauded amount over four calendar years. With this measure, many instances of Social Security fraud that until today were punishable only via administrative actions will be criminally punishable.
From a labor perspective, the Labor Offences and Penalties Law (the "Law") has been amended to include new administrative offences and sanctions. For example, an employer employing workers who have requested or are receiving public pensions or other regular public Social Security benefits which are incompatible with employment is now considered as having committed a serious offence (sanctioned by a fine of up to €6,250). The Law also includes a new very serious infringement (sanctioned by a fine of up to €187,515) for employers that hire workers who are affected by employment suspension/working hours' reduction measures. The aim of these two provisions of the Law is to avoid the fraudulent conduct of certain employees who simultaneously receive Social Security benefits (e.g., public unemployment benefit) as well as a salary. Employers are now compelled, before contracting or hiring an employee, to ensure that such employee is not receiving any Social Security benefits that are incompatible with receiving a salary.
Finally, with regard to outsourcing activities (i.e., contracting services between companies and professionals), the liability of the employer outsourcing part of its activity has been extended. To date, the principal company was jointly and severally liable for the Social Security obligations of the contractor's and subcontractor's employees during the length of the outsourcing. Now, such principal company's liability is extended to three years after the end of the services provided.