Social fraud inspection audits conducted by the District cells have been focusing on the construction sector: 2020 in retrospect

Social fraud inspection audits conducted by the District cells have been focusing on the construction sector: 2020 in retrospect
November 30, 2020

As the end of 2020 is nearing, it is time for the traditional end-of-year lists. 2020 will undoubtedly be remembered as the year in which the entire world encountered the Covid-19 virus but that has not prevented the Belgian social inspection services from proceeding with its inspection audits. Once more, the available (provisional) data[1] reveals that the construction sector has remained a highly-targeted sector. We have listed some interesting figures in the overview below.

Social fraud inspection audits in the construction sector

According to SIOD’s 2020 action plan, there was an intention to conduct 2,000 audits in the construction sector, including so-called “flash audits” in March 2020.

SIOD recently published the results of the social audits, conducted by the different District cells (Arrondissementscellen / Cellules d’arrondissement) in Belgium, covering the period Q1-Q3 of 2020.

The District cells are part of the Social Information and Investigation Service (SIOD). Each District cell’s key activity is to organise and coordinate social inspection audits concerning illegal employment and social fraud.

An analysis of the data reveals the following:

  • So far, a total number of 6,982 audits have been reported. 2,201 of them have been conducted in the construction sector (or +/- 31.5%).
  • A total number of 13,309 employees have been controlled, including 3,072 employees active in the construction sector (or +/- 23%). 5,067 self-employed individuals have been subject to an audit, of which 1,524 have been active in the construction sector (or +/- 30%).
  • In the context of these 2,201 construction sector audits, 337 breaches (or +/- 15%) were observed in the following areas falling under the scope of “undeclared work”:
Type of breachNumber of breaches
Dimona legislation114
Part-time work16
Social security legislation (e.g. non-compliance with payment of contributions on time)6
Unemployment78
Violation foreign employee legislation (e.g. employees who did not possess the legally-required work permit and/or residence permit)46
Limosa legislation77
  • On the occasion of these 2,201 audits, and next to breaches falling within the scope of “undeclared work”, another 1,246 “more traditional” breaches were observed (e.g. relating to working time).
  • The data reveal that non-compliance with the Dimona or Limosa legislation almost always results in a formal pro-justitia. The same goes for employing employees without the required work- and or residence permit.

This is not the case for social security-related breaches. We believe this is seen by the fact that in such a scenario, employers often commit to making the necessary social security rectifications, possibly in the context of an amicable arrangement with the public prosecutor’s office.

For the sake of clarity, the figures above do not provide for an overall figure of all types of social inspection audits. The figures only cover the coordinated actions instructed by the District cells. The “standard” social inspection audits, conducted by the Labour inspectorate (Toezicht op de Sociale Wetten / Le Contrôle des lois sociales) are not included in the overview above. 

The figures, even though provisional, demonstrate that the construction sector was also in 2020 a highly-targeted sector. We expect this trend will continue in the coming years. Despite the various legislative measures that were taken in previous decades, the construction sector, social dumping and social fraud are still often mentioned in the same breath.  

Covid-19 inspection audits in the construction sector

As it is impossible to ignore the Covid-19 crisis from 2020, we also take the opportunity to summarise the results of the flash audits focusing on compliance with Covid-19-related measures in the construction sector. Such flash audits took place in September 2020. 127 companies were subject to such a flash audit, in which 183 employees and 87 self-employed individuals were checked.

Compliance checksObservations
Public Health Passenger Locator FormBreaches observed in 12.37% of the audits
Registration of the place of residence of foreign employeesBreaches observed in 50% of the audits
Covid-19 health and safety measuresBreaches observed in 12.24% of the audits

From these figures it can be concluded that most employers in the sector have been complying with the Covid-19-related health and safety measures, e.g. complying with the social distancing rules.

Although SIOD announced that it would not continue the flash audits in October 2020 and thereafter, it still urges the District cells to continue to control compliance with Covid-19-related sanitary measures. In this respect, it is useful to know that SIOD has published a Covid-19 (sanitary measures) checklist to be used by inspectors. This checklist reveals the attention points that the inspectors are putting a focus upon, such as hand hygiene, social distancing, general hygiene, ventilation, information towards third-parties (e.g. interim workers or external contractors), telework, compliance with the specific and derogatory registration obligation in the construction sector when temporarily calling upon foreign workers or self-employed individuals. The most recently updated checklist can be found through the following links. Click here for the Dutch version and click here for the French version.

For more information or for audit-related assistance, please do not hesitate to get in touch with Emma Van Caenegem.

[1] https://www.siod.belgie.be/nl/publicaties/arrondissementscellen-statistieken-2020-1ste-2de-en-3de-kwartaal-gecumuleerd

Written by

  • Emma Van Caenegem

    Counsel

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