Law firm specialising in employment law
and social security law.
Law firm specialising in employment law
and social security law.
Are you or your company subject to an URSSAF inspection? Have you been notified of an upcoming inspection?
An inspection can easily disrupt the life of a business and jeopardise its financial health or cause stress if you are personally affected.
It is thus essential to adopt the right reflexes in order to limit the risks of adjustment or to have a better chance of winning in the event of litigation.
Our team can support you in your steps, from the inspection notification to litigation.
In this column, we explain everything about URSSAF inspections and how we can help you.
This is a procedure whereby URSSAF collection agents will inspect a legal or natural person subject to social security contributions or declarations, called the "contributor", in order to check the proper application of the regulations in this area.
Whether you are a legal entity (company, association, social and economic committee, etc.), its manager or an individual entrepreneur/self-employed person, you are a contributor and can therefore be inspected!
Rest assured, being subject to an URSSAF inspection does not necessarily mean that you will be subject to adjustments!
Indeed, you may be subject to an URSSAF inspection for several different reasons.
First of all, contributors' files are randomly selected. The statutory limitation period being 3 years in terms of social security law, your file is therefore put back in this list every 3 years after the last inspection.
Secondly, inspections may have been carried out by other administrations (such as the tax authorities) which will inform the URSSAF about certain points identified, which must be checked by the inspector. As a result, it is not uncommon for one inspection to trigger another...
More rarely, reports or information that lead URSSAF agents to presume that a structure or a natural person is not fulfilling its obligations may trigger an inspection.
The inspection may involve social security contributions and all the recovered charges provided for by the French Social Security Code (CGS/CRDS, mobility payment, FNAL, etc.).
Similarly, the URSSAF is authorised to inspect unemployment insurance and AGS (wage guarantee scheme) contributions, or even the AGEFIPH (association for the management of the disability employment fund) contribution.
From January 2022, the URSSAF will finally also be authorised to inspect AGIRC-ARRCO pension contributions, the contribution to vocational training and the apprenticeship tax.
Multiple aspects may be checked as part of an URSSAF inspection.
From experience, we can list a few major points that are most often noted as part of the inspections that our clients have undergone in recent years:
There are several types of inspection: either documentary inspection or on-site inspection (also known as base accounting inspection).
Documentary inspection is carried out by an agent on the URSSAF premises and is intended for small businesses but also for the self-employed.
The "traditional" on-site inspection, on which we will focus, is carried out by the inspection agent visiting the company's premises. This inspection is by far the most "well known" in that it generates many questions related, besides the inspection itself, to the rights and obligations of each party to the inspection.
In the majority of cases, you will be notified that you are to be inspected by the URSSAF within strictly regulated deadlines.
Indeed, concerning the majority of the points of inspection, the French Social Security Code requires the URSSAF to send a notice of inspection to the contributor at least 15 days before the date of the agent’s first inspection (according to Article R.243-59 of the French Social Security Code, or even 30 days according to the Charter for Contributors under Inspection).
This notice informs the company of the terms of the inspection:
On the other hand, in certain cases, the labour inspector may appear unexpectedly and without having first notified the company of his/her arrival. This happens in cases in which compliance with regulations in the field of undeclared labour (failure to declare employees on duty for example) is being inspected.
No! The employer has an obligation to provide the URSSAF inspector(s) with access to its premises and to provide the documents previously requested.
Otherwise, the employer is causing an impediment to the inspection that is punishable (by fines that can be very significant, up to 7,500 euros per employee within the limit of 750,000 euros for an employer that is a legal entity for the first infringement).
As part of an inspection, the URSSAF inspector can trigger two types of actions.
First of all, he/she will be able to consult documents belonging to the company (which will have been previously requested).
In this context, the entity inspected must make available to him/her all the documents requested and allow access to any information medium necessary for carrying out the inspection.
In addition, the right of communication allows inspection agents to obtain, from third parties, such as banks, without prejudice to business secrecy, documents and information necessary for the performance of their tasks (provided that the contributor has been informed – Court of Cassation, 2nd Employment Division, 12 March 2020 no. 19-11399).
The most frequently requested documents are the following:
Failure to send the requested documents may result in a flat-rate tax adjustment, which results in the application of a standard formula per employee and per year to obtain an adjustment amount.
It is for this reason that the supporting documents of declarations made, and the calculation and payment of social security contributions must be kept long enough so that they can be sent in the event of a request from the URSSAF. In principle, the retention period is 6 years, and is not limited for certain documents.
Note: the Court of Cassation specified that, during the inspection, the URSSAF inspector could not search for the documents needed or proceed with their seizure.
Then, he/she will be able to interview the company employees.
Any person paid by the company or who performs duties there (accounting, payroll manager, etc.) may be heard by the inspection officer; the latter may take the employee’s surname, first name, address, level of remuneration, etc. This interview may only take place in the workplace.
The inspector is not obligated to invite the employer to this interview; he/she may question the employees without the employer being present.
Lastly, he/she will carry out an end of inspection interview.
In the event of an on-site inspection, at the end of his/her investigations, when observations with or without adjustment are envisaged, the inspection officer must propose an interview to the contributor in order to present the result of his/her analyses (except in the case of undeclared labour which is the subject of special measures and rules).
There are two main methods of verification:
Exhaustive verification
Documents relating to all inspection years are analysed in their entirety by the inspection agent.
Verification by sampling and extrapolation
Verification is limited to a representative sample of the population concerned and allows the inspector to extrapolate the results to the entire population. This system presupposes the observance of a specific procedure to ensure that the inspection is not tainted by irregularities and usually concerns large companies.
This is the most widely used method in practice, as it reduces the duration of the inspection and the constraints on the production of documents, in terms of volume.
The duration of the inspection
Unless there is a situation of undeclared labour, or a particular obstacle to the inspection, for companies with fewer than 10 employees (group workforce), the inspection may not extend over a period of more than 3 months between the start of the inspection and the date on which the letter of observations is sent (see point 12).
This inspection period may be extended once at the express request of the contributor or the URSSAF.
The period inspected
The inspection is limited in time by the statutory limitation period for social security contributions, which is 3 years (5 years in the case of illegal work infringements).
The inspection may cover, at most, the last 3 calendar years and the current year. However, the period may be shorter if the URSSAF so decides.
Do you need help? Contact our firm for assistance
During the inspection, you can be assisted by the counsel of your choice. It is therefore essential, during this period, to be assisted by your lawyer.
Yes! The inspection agent may, after informing the contributor, carry out inspection operations by implementing automated processing using the computer equipment used by the contributor. (Article R.243-59-1 of the French Labour Code)
A special procedure exists in the event of refusal of the contributor, who will then have to make available to the agent all the elements requested either in writing or by carrying out itself the processing requested so that the URSSAF can obtain the elements requested.
Sometimes the end of the inspection does not call for observations or adjustment.
Sometimes, credits in favour of the inspected entity are even detected during the inspection, which will result in a refund from the URSSAF.
The inspection procedure ends here.
On the other hand, when observations or an adjustment are envisaged, further steps are provided for in the legislation.
The observations letter
If the inspector finds points of deviation from the regulations, he/she sends the contributor an observations letter indicating the potential grounds for adjustment of which it is accused.
An adversarial period of 30 days (which may be extended to 60 days at the request of the contributor or on the decision of the inspection agents) then begins, allowing the parties to discuss the alleged breaches.
During this period, it is essential to be assisted by your lawyer. Indeed, many contentious points can be eliminated during this first stage. Our team can help you structure your response to observations.
The assistance of a professional is also essential insofar as, from this stage, numerous formal and substantive irregularities may be raised in an attempt to obtain the annulment of a possible adjustment.
Formal notice
At the end of the adversarial period, if an adjustment is envisaged and if the contributor's arguments have not been convincing, the inspection agent issues a formal notice.
After the receipt of the formal notice, several situations are possible:
Proceedings before the court of justice.
When the contributor has no success before the "CRA", it must bring a legal action before the court of justice (formerly "social security court" or "TASS").
The role of the lawyer is even more important during this phase, which lasts several months or even years, and which requires all possible legal arguments to be developed in order to be able to obtain the annulment or reduction of the amount of the adjustment.
An appeal to the Court of Appeal may follow, depending on the outcome of the case.
Order to pay
In the event of adjustment, the URSSAF has several means to recover the sums it considers due to it.
After a formal notice has remained ineffective, most often, it uses the means of an order to pay, delivered by judicial officer or by direct notification.
It is then necessary to formulate an "objection" to an order to pay to oppose the recovery measures carried out by the URSSAF, especially if you have initiated a procedure to challenge the adjustment concerned.
The issue here is twofold since:
In these emergency situations, we support our clients to ensure that the procedure is correctly complied with Contact us.
Note: The fact of having appealed to the CRA or the Court of Justice does not preclude the URSSAF from pursuing recovery procedures, through an order to pay. It is not uncommon in practice to have to object to an order to pay in parallel with a legal action already initiated, and thus to have several cases pending for the same adjustment.
Contributors have many rights at all stages of the inspection procedure. Without claiming completeness, here are some examples of rights and procedures favourable to the contributor in the context of which we assist our clients.
This Charter sets out for the person under inspection the inspection procedure and their rights.
Since 1st January 2017, the provisions contained in this Charter have been enforceable against the URSSAF. Specifically, this means that if the URSSAF has not complied with the rules it has set down itself, then an adjustment may be annulled.
With the exception of undeclared labour, the contributor may invoke an implicit decision taken by the URSSAF during a previous inspection, to try to obtain the annulment of an adjustment notified to it.
The aim will be, very briefly, to demonstrate that an inspection has already been carried out by the same URSSAF, on the same company or the same place of business, and did not give rise to observations when the practices of the contributor and the legal situation were the same. (Article R.243-59-7 of the French Social Security Code)
This procedure allows the contributor to question the URSSAF on the application of a regulation and to obtain, within a given time, an explicit response on its situation or practice.
The body must notify its decision within 3 months of the day on which the file is completed. Once this period has expired, the contributor may consider its position as validated and it may not be subject to an adjustment based on the point covered by the referral between the date on which the period expired and the date of notification of the explicit response.
Where the explicit decision has been taken, it is binding on the body for the future as long as the factual situation set out in the application or the legislation in question has not been altered.
Note: As soon as the employer has received the inspection notice, it can no longer question the collection agency in the context of the social security ruling. Therefore, in the event of questions on an URSSAF subject, it is necessary to anticipate and consult your lawyer, who can guide you on whether or not it is advisable to request a social security ruling.
If the request relates to a specific application of the legislation to a professional sector, the Acoss (central agency of social security bodies) must respond within 4 months of receipt of the complete request. Any company in the sector can avail itself of this.
The right to make mistakes allows the contributor to correct an error made in a declaration to the administration without penalty.
To do this, the contributor must meet the following three cumulative conditions:
Note that the right to make mistakes is not applicable in all situations and for all mistakes. It may be useful to get in touch with our team if you wish to explore this point further.
Any contributor may request to be inspected by the URSSAF under which it falls. (Article L.124-1 of the Code of relations between the public and the administration)
If errors are found during the inspection, they will not be accompanied by financial penalties when the conditions to benefit from the right to make mistakes are met.
The observations resulting from the inspection on request will be binding on the URSSAF.
Our advice: anticipate! As we have seen, an URSSAF inspection can not only be time-consuming but also financially detrimental for a legal or natural person.
This is why it is essential to anticipate and ensure, through audits for example, that your situation is analysed in order to check that the most recurring points of inspection are mastered and comply with regulations.
In this context, we work in partnership with URSSAF inspection specialists (former recovery inspectors) with whom we conduct comprehensive audits and blank checks, to allow you to anticipate and correct, if necessary, certain practices that may be subject to adjustment in the event of inspection.