First of all, let’s answer whether you can be fined if you hire someone who is receiving unemployment benefits. It depends.
- You CANNOT be fined IF you register the worker who is receiving unemployment benefits with Social Security.
It’s quite logical. If you register them, it is assumed that you did not know they were receiving unemployment benefits because they automatically stop receiving benefits when they are registered.
- You can be fined IF you do NOT register the worker who is receiving unemployment benefits.
This is logical, apart from the fact that not registering a worker is illegal in itself. The labour inspectorate may assume that you were in cahoots with the worker so that they could continue receiving benefits.
Although we have already answered the question, we will delve a little deeper into this issue in the following lines.
Nowadays, companies and freelancers find it difficult to find people to work for them, so they take anyone they can get.
And it’s understandable, because with the high cost of living right now, it’s often better not to work and not get paid than to spend money and earn little.
But it’s also difficult for employers to offer jobs, because they are the ones who have to earn enough income to pay their employees, pay taxes for Social Security expenses, and this is very difficult to achieve.
You hired an unemployed person.
You have hired an unemployed worker who has continued to receive unemployment benefits despite being employed.
Can your company be fined?
If so, how much could the fine be?
Incompatibility of working and receiving unemployment benefits
In general, receiving unemployment benefits and working for someone else are incompatible.
In this regard, working for someone else for less than 12 months is grounds for suspension of unemployment benefits and must be reported to Social Security.
If it lasts more than 12 months, it is grounds for termination of such benefits.
Serious and very serious offences
If an employee performs work for another person while receiving any benefit that is incompatible with work, they will be guilty of a serious offence and will be penalised with the loss of that benefit for three months.
If the benefit received by the worker is unemployment benefit, performing incompatible work will constitute a very serious offence, in which case the benefit will be terminated completely.
Can my company be penalised if I hire a worker who is receiving unemployment benefits?
As we have said before: it depends
Notification to SEPE and compulsory registration with social security
If you hire a worker who is receiving any benefit that is incompatible with employment, make sure that this is reported to SEPE and that the worker is registered with social security.
If you do not register the affected person before the start of the service provision, you will be committing a very serious offence, which can be punished with a fine ranging from €12,001 to €225,018.
In this case, if there are no aggravating circumstances, the Labour Inspectorate may only impose the minimum fine (€12,000).
However, if more than one worker is affected, the amount of the fine will be increased as follows:
- 20% for each infringement involving two workers.
- 30% for each infringement involving three workers.
- 40% for each infringement involving four workers.
- 50% for each infringement involving five or more workers.
Under no circumstances may the penalty exceed £225,018 per worker.
What happens if a worker is employed part-time and receives unemployment benefits?
Unemployment benefits are compatible with part-time work, provided that the worker has expressly requested this compatibility.
In this case, the benefit will be reduced in proportion to the time worked.
Report the worker’s registration YES or YES
In any case, always report the worker’s registration. If the Labour Inspectorate finds that a person is combining unemployment benefits with a new part-time job without the company having reported their registration in the General Scheme, this will not be considered a very serious offence, because the benefit is compatible
However, the company may incur other liabilities:
- The company will be fined between €3,750 and €12,000 for failing to report the registration (with an increase of 20% to 50% in the cases indicated above, up to a maximum of €12,000 per employee).
- The Inspectorate must verify that the work is indeed part-time and not full-time.
To sum up the answer to whether I can be fined if I hire someone who is receiving unemployment benefits
If your company has full-time employees who are still receiving unemployment benefits and you have not yet registered them with Social Security, you will be committing a very serious offence, punishable by fines ranging from €12,001 to €225,018.
