Pandemic worsens the nightmare of being paid under the table

The penalties for companies for not having a worker registered with the Social Security can be up to €10,000

4 min
A waiter serves customers at a restaurant on Barcelona's Rambla.

BarcelonaNúria Sánchez (not her real name) started working in a cafeteria in Barcelona's Eixample district four months before the pandemic broke out. She worked 40 hours a week but her contract was (and still is) only part-time; therefore, of the €1,000 she earned, half were "black money". "I needed to work after seven months on the dole, bills had to be paid at home and I took the job despite knowing that the company did not comply with the law," she explains.

Due to covid restrictions, the business had to close for a few months and she became part of the workers who were put on furlough (ERTE). She was on and off furlough up to three times (depending on whether the measures to curb the pandemic were more or less restrictive). And these three times the salary of €1,000 became only €350, 70% of the €500 she received for her officially part-time job. "I had to ask for a moratorium on the mortgage, which is paid out of my salary," she explains. They were able to cope with day-to-day life on her partner's salary. Currently she continues to work at the same place, even though she is looking for a job. "I've lost count of the number of times I've been offered a full day's work but with 10 or 20-hour contracts," she says.

Cases like Sanchez's have surfaced during the pandemic and have brought many workers to live on the poverty line, especially those who have no contract because they have not been able to receive any kind of benefits. "Paying part of the salary under the counter is unfortunately a very common practice, despite being illegal," explains labour lawyer Robert Gutiérrez. "The fact that part of the working day is not paid not only affects furlough or unemployment benefits, but also what the worker will end up receiving when he or she retires or in the event that he or she has to take sick leave," he adds. In addition, the fact of not signing on for the full 40 hours means the person pays less tax.

To minimise these irregular practices, and others, a little over a year ago Social Security fraud commissions were created at the provincial level, representing employers, unions and administrations. "But it is very difficult for the worker to report it, because when you offer a contract to someone looking for work, they sign it," clarifies the secretary of trade union action of Comisiones Obreras in Catalonia, Cristina Torre. The union spokeswoman admits that it is a practice that has been entrenched in the Spanish labour market for years and that is difficult to solve. "On the one hand the Labour Inspectorate has to intensify its work in the sectors where it occurs more," she explains. But on the other hand, she also makes it clear that you cannot have an inspector in each company, and therefore argues that they the fines ought to be higher and, above all, there is a need to raise awareness among employers.

The sectors where these practices have been detected, according to the union, are the service industry, especially the hotel, catering and domestic workers, and in agriculture. "It also happens in construction or in jobs such as electricians and carpenters," adds Gutiérrez.

555 furlough irregularities

Obviously there is no official data on how many workers suffer this situation. Even so, since the furlough system was set up to deal with the pandemic's consequences, the Labour Inspectorate has detected 555 irregularities related to these files in Catalonia, which have been punished with €2.3m. In the whole of the State there have been 5,459 infractions, punished with nearly 26 million euros in fines. "Part of these fines are precisely because the worker was working more hours than he was supposed to," says Torre.

The sanctions of the Labour Inspectorate to a company for not having a worker registered with Social Security range from €3,126 to €10,000, depending on the severity. "Apart from the fine, the company is also obliged to pay the Social Security contributions that have not been paid," specifies the lawyer.

Despite the regulations, a study published in August by Infojobs, in which almost 5,000 people between the ages of 16 and 65 participated, said that one in four young people under the age of 24 (the group that suffers the most unemployment) had received part or all of their salary off the books during the last three years. The report highlights one more conclusion: that one in five Spaniards would be willing to collect the salary under the counter, a percentage that rises to 35% among those who are unemployed.

Among young quests there is Pepe E., who worked for almost a year in a bar in Seville making €6.5 an hour cash in hand. "They only had hired two or three workers to look like they were complying with the regulations, and all the rest were off the books", he explains. His working hours also changed constantly: "One week I could work 50 hours and another 20, and this made it impossible to know what income I would have at the end of each month".

Mercè Martínez (not her real name) has the same uncertainty. She works in the interior design sector in Barcelona and receives a salary of €1,200 a month. But all the bonuses, with which she can double her salary, she receives off the books and also one Saturday of each month she is forced to work without pay, despite the fact that it is overtime. "When covid stuck and I was furloughed for more than two months, of course, my salary plummeted, it did not reach 900 euros," she explains. "But the most serious thing is that the company forced us to continue working despite the furlough," she adds. Only two workers complained, one has already left the job and the other is constantly reproached for his attitude in the company. "I had been working for a month and I said yes to everything. There are times when I try to look for a job but my university classmates are still worse off than me," she laments. The fact that her salary is so low makes her day-to-day life difficult: "You can't consider buying a flat, or a car, or anything else because the bank won't give you a mortgage with this salary", she complains.