Liability for Social Security debts in subcontracts

Social Security certifications do not certify, that is what the Supreme Court has come to say in an interesting and transcendental ruling that has modified the scenario of liability for debts in the case of subcontracting.

All this because, in the opinion of the Supreme Court, the certifications of the TGSS on the absence of debts do not imply the absence of debts, that is to say that nothing prevents the company in favor of which the certificate has been issued from having obtained some deferrals and that it may not comply with them in the future. This and other similar questions have become frequent in our Online Labor Advisory service.

That is to say, that the certifications do not have the value that until then was given to release the subcontractor from liability with respect to social security obligations. It is worth asking how we can help to solve this point in our Asesoría Laboral Online.

Let’s take it one step at a time

It is very common that in our Online Labor Advisory service we are asked about liability at the time of subcontracting a service that is part of the ordinary activity of the company, in particular about liability for debts.

We anticipate that it is necessary to distinguish the following:

• Debts prior to hiring are exonerated with the certificate of being up to date with Social Security payments.
• Subsequent debts, those relating to the months in which the workers are providing services through the subcontractor, are those that are not exonerated by the provision of the certificate of being up to date with payment.

Let us distinguish between:

• The Supreme Court’s reasons for doing so
• The solution we propose, which is mentioned at the end of the article

An Overview of the SC Ruling of February 3, 2021

The Ruling, issued by the Administrative Chamber of the Supreme Court, introduces a novel interpretation that directly affects companies that subcontract part of their activity. The heart of this doctrine lies in the liability of the main companies with respect to the social security debts of their contractors and subcontractors.

Interpretation of Article 42 of the Workers’ Statute

The focus of this interpretation centers on Article 42 of the Workers’ Statute, which until now allowed the main companies to avoid liability for Social Security debts of their contractors by obtaining a negative overdraft certificate from the Social Security General Treasury (TGSS). However, the Ruling clarifies that this certificate only releases from liability for debts prior to the beginning of the contract, leaving the main company still vulnerable to debts generated during the contracting period.

Practical Implications for Businesses

This interpretation is a call to action for all companies, especially in the technology sector, where agility and innovation are crucial. The ruling underlines the importance of reviewing and possibly redesigning internal procedures and control mechanisms regarding the social security obligations of contractors and subcontractors.

What solution do we propose about social security

From our service of Asesoría Laboral Online we understand that the contractor company must request from the subcontractor the proof of the payment of the social insurances, of the old TC1 and of the opportune bank voucher.

In this case, the payment of the TC1 does not prove that the workers have been included in the appropriate list of workers, the old TC2, with respect to which we understand the difficulty of its contribution to the subcontracting companies, since they contain information of each and every one of the workers of the staff, whether or not they are providing services for the subcontractor.

How else can we help you?

Our commitment is to ensure that your human resources management is always one step ahead by using our Online Employment Advisory service, minimizing risk and maximizing operational efficiency. If your company operates in the technology sector and is looking to successfully navigate the implications of this ruling, we invite you to contact us. Our Online Employment Advisory service is ready to ensure that your company not only complies with its legal obligations, but also thrives in an ever-evolving employment environment.

Conclusion

The SC Ruling of February 3, 2021 is a critical reminder of the importance of a specialized and proactive labor advisory, in particular an Asesoría Laboral Online, can collaborate knowing our focus is on providing the most updated and effective Asesoría Laboral Online, helping companies in the technology sector to adapt and overcome the legal challenges.
Contact us to explore how we can strengthen your company’s human resources management in this new legal context with our Online Employment Advisory services.

Do you need help? At Cigarrán Abogados we can help you (+34) 91.355.85.15