What to do if your boss in Spain isn't paying your social security

It is estimated that the Spanish underground economy is worth somewhere around €230-€240 billion.

Back in 2021, it accounted for 16.9 percent of Spain's entire GDP, a huge proportion and a fair bit above the EU weighted average of 14 percent.

Working en negro ('in black', or under the table) is still very common in Spain and contributes massively to the underground economy.

According to a study by the Organisation of Professionals and Self-Employed Workers (OPA), the sectors where cases of the underground economy are most common are domestic and cleaning services, agriculture, construction, transport, taxi drivers, hairdressers and the hospitality industry.

READ ALSO: Under the table - How many workers in Spain don't pay taxes?

As part of this underground economy, companies often pay workers an official amount declared on their payslip, usually paid by bank transfer, but may also hand over an amount in cash that is not recorded or reported anywhere.

Employers do this to avoid paying the corresponding social security contributions and, in the event of dismissal, to lower compensation for the worker. It's also a common way to declare less income and therefore pay less tax.

The negative impacts aren't just on the Spanish economy, but workers too.

Though some employees might actually argue they prefer this for reasons of flexibility or because they don't want to pay tax, in reality it could land you in some legal trouble and denies you access to key welfare benefits you should be getting, such as access to public healthcare, unemployment benefits or a state pension.

Many of these unfairly treated workers are known as falsos autónomos (fake self-employed workers) as the hours they work, their role within the company and the regularity of their work usually correspond with full-time employment, but in the eyes of the law they are freelancers because their boss isn't paying their security security.

There is such a thing as a TRADE worker in Spain, an economically dependent self-employed person who works primarily for a single client (at least 75 percent of their income), but maintains autonomy in the management of their economic activity.

One of the main differences between a TRADE worker and a falso autónomo is that the latter is usually subjected to a hidden and/or deceitful work arrangement.

What to do if your boss in Spain doesn’t pay your social security

If you're being paid under the table in Spain and your boss isn't paying social security but you would like to do something about it, you have a few options.

You can report the irregularity to various places:

• by reporting to the anonymous tip-off address for labour fraud, available on the Labour Ministry website here.
• by filing a formal complaint with the Labour Inspectorate (in person, through a public register or online)
• By filing a labour claim with the Social Courts (Juzgados de lo Social in Spanish)

Options to do this anonymously are available.

To make a compliant to the Labour Inspectorate, the employer's liability will only extend to the previous four years as per Article 24 of Spain's General Social Security Law).

The complaint can be filed:

• In person, at a provincial Labour and Social Security Inspectorate office, or at the registry of any state, regional or local government body.
• By post, sending it to the relevant Labour Inspectorate office, accompanied by a certified copy of the complainant's ID card.
• Online, via the Ministry of Labour , if you have an electronic ID card or digital certificate.

In some cases, negotiation may be beneficial. You can try to resolve the issue with your employer through dialogue and agree on a plan to bring the late payments up to date. This option may be particularly useful if you wish to maintain an employment relationship and stay in the job.

Whichever option you go for, you may benefit from seeking legal advice, especially from a lawyer specialising in employment law.

Note that, when legal action has been taken and there is a court ruling recognising the worker's actual salary, a complaint can then be filed with the Labour Inspectorate to require the company to pay the contributions corresponding to the undeclared payments.

The company will have to legally regularise their employment situation and pay social security contributions for the last four years. This will increase the contribution base and, consequently, the amount of benefits received by the worker in the long-run.

Proving that your boss is paying you ‘under the table’ and not making social security contributions can be tricky, however.

The most logical thing to do would be to contact other colleagues to back up your version of events and move forward together in the process, but this is extremely complicated, as some may worry about risking their jobs.

As an alternative option, some suggest trying to get evidence, whether by writing, audio or video, of the boss making such a payment in cash and not making social security payments.

However, many people won't feel comfortable doing this, and, in a court of law, conversations recorded without consent are not accepted as evidence unless we are participants, so it's not even sure to work anyway.

Our journalists at The Local are not legal experts. If you're considering making a legal claim, seek the advice of a legal professional.