1. Introduction of the definition of Social Dumping

The reform introduces a definition of “social dumping” into the Social Criminal Code.

Although social dumping is not yet classified as a distinct criminal offense, it is now defined as “a set of deliberate abusive practices aimed at circumventing applicable European and/or national legislation, including relevant laws and collective agreements. These practices lead to unfair competition by illegally reducing labor and operational costs, resulting in the violation and exploitation of workers’ rights.”

This new definition is intended to strengthen preventive measures against social dumping and harmonize monitoring and control standards.

2. Extension of the recidivism period

Individuals convicted of recurring social offenses will face enhanced penalties. The recidivism period has been extended from 1 year to 3 years. In the case of recidivism, only fines can be doubled, while imprisonment penalties will not be subject to doubling.

3. New aggravating factors

The reform introduces the concept of “aggravating factors” into the Social Criminal Code.

When an offense is punishable by a level 4 sanction, the fact that it was committed knowingly and deliberately becomes an aggravating factor for the judge to consider when determining the penalty.

For example, the failure to subscribe to workers’ compensation insurance, providing inaccurate or incomplete information regarding temporary unemployment, failing to produce the annual social report, violations related to the certification and approval of the social report by auditors, accountants, or commissioners, as well as the failure to submit certain documents to institutions such as the NSSO, and the public and abusive use of designations such as “Existence Security Funds” and “Social Secretariat,” are among the offenses subject to more severe penalties.

Additional aggravating factors include the use of complex structures to conceal illegal practices, the involvement of a criminal organization, or the occurrence of particularly severe harm to the affected workers, which also lead to increased penalties.

4. Expansion of the definition of “Employer”

The reform broadens the definition of “employer” to include not only individuals but also legal entities and their legal representatives who fail to meet their employment and social security obligations. The new definition also encompasses potential employers, thereby strengthening the fight against discriminatory hiring practices.

5. Introduction of new offenses

The legislator has introduced new offenses into the Social Penal Code that were previously not subject to penalties.

For instance, failure to comply with rules regarding time tracking in the case of flexible schedules is now subject to a level 2 penalty. The obligations of temporary employment agencies have also been tightened, particularly with respect to guaranteeing minimum wage payments during periods of inactivity for indefinite-term contracts, with a penalty increased to level 3. Lastly, the issuance and delivery of vacation certificates to workers are now subject to a level 2 sanction.

6. Enhanced penalties for activity bans and business closures

The revised Social Criminal Code expands the scope of activity bans and business closure penalties. These penalties are no longer limited to the businesses where the offense was committed but extend to any business or establishment operated by the convicted party, aiming to prevent the creation of new entities to evade these penalties.

7. New penalty of exclusion from public procurement or concessions

A new penalty is introduced: exclusion from public procurement or concessions. This measure, applicable to level 3 and 4 offenses, can last from 3 to 5 years.

8. Revision of penalty levels

Penalty levels have been revised: fines for level 3 offenses (whether criminal or administrative) have their range doubled, and the maximum amount for level 4 fines has also been increased. The amounts for other fines and the duration of imprisonment for level 4 remain unchanged.

Overview of Penalty Levels

	Administrative Fine (EUR)	Criminal Fine (EUR)	Imprisonment
Level 1	10 to 100	/	/
Level 2	25 to 250	50 to 500	/
Level 3	100 to 1000 Previously => 50 à 500	200 to 2000 Previously => 100 à 1000	/
Level 4	300 to 3500 Previously => 300 to 3000	600 to 7000 Previously => 600 to 6000	6 months à 3 years

All amounts listed above must be increased by additional decimal points.

9. Increased penalties and new offenses for non-payment of compensation

Offenses related to non-payment of wages and benefits have seen their penalty level increased from 2 to 3, thus quadrupling the penalties, with level 3 fines doubled.

Additionally, new provisions have introduced level 2 sanctions for offenses concerning eco-vouchers, work clothing, and tools, as these are considered less severe compared to non-payment of wages and benefits.

10. Modification of penalty levels for violations of notification and information rules in collective dismissals

Penalties for violations of notification and information rules in collective dismissals, as well as breaches of procedures for informing and consulting workers, have been increased from levels 1 and 2 to level 3, ensuring greater consistency in penalties related to consultation bodies.

11. Increased sanctions for undeclared work

The reform of the Social Penal Code strengthens sanctions against workers involved in undeclared work (off-the-books employment) when they knowingly engage in such activities. Previously, this offense was punishable at level 1 but is now raised to level 3, reflecting a stronger commitment to combating this phenomenon.

12. Reduction in sanction levels for certain offenses

This reduction in sanction levels targets relatively rare offenses, such as information obligations related to medical examinations, advertising formalities for public holidays, and failure to submit the social balance sheet, among others. These obligations, which were previously subject to level 2 sanctions, have now been reduced to level 1.

Moreover, certain offenses have undergone more substantial modifications, with some sanction levels abolished, such as the requirement to notify labor inspections in case of work on Sundays or public holidays, or the exceeding of normal working hours for unforeseen necessities.

13. Strengthening the independence and powers of social inspectors

The new Social Penal Code strengthens the independence of social inspectors. Among the notable changes, these inspectors can now request police assistance to access workplaces or conduct home visits.

Moreover, the reform broadens the scope of their powers, as self-employed workers are now also subject to inspectors’ demands, whereas previously only the employer, their agent, or their representative were required to comply.

14. New Rules Regarding the Organization of Subcontracting Chains

The reform introduces specific provisions regarding the organization of subcontracting chains in the construction, meat industry, and moving sectors, establishing joint liability for wage debts, ensuring that workers are paid even if their direct employer fails to fulfil their obligations.

15. Extension of the administrative fine erasure period

The period for erasing an administrative fine has been extended from 3 years to 5 years. When determining the amount of an administrative fine, a decision imposing a fine or declaring guilt that was issued 5 years or more before the events in question cannot be taken into account.
This 5-year period starts from when the decision becomes enforceable or when the final judgment on the offender’s appeal is issued.

16. Conclusion

Employers and workers should pay close attention to the new provisions of the Social Criminal Code, particularly regarding new offenses and enhanced penalties.

For any questions or to receive guidance on complying with these new regulations, please contact our employment law team. For more information, reach us at +32 (0)2 747 40 07 or email info@be.Andersen.com.