Undisclosed work: when the failure to make a prior declaration of hiring suffices to establish intent

Imagine: you own a small building in Mandelieu-la-Napoule, and you hire a caretaker to maintain the common areas. You pay him a salary, but also "travel allowances" for him to go and get supplies. Everything seems normal, until the day the URSSAF turns up and demands unpaid contributions, together with penalties for undisclosed work. You thought you were in order, but the courts decided otherwise. That is exactly what happened in the case decided by the Court of Cassation on 2 December 2015 (No. 14-22.311).

This decision raises a crucial question for every employer: at what point does an omission or a dubious practice become undisclosed work? The answer is simple: as soon as you have not complied with the prior declaration of hiring (DPAE) and you pay sums under a different description than salary, you fall foul of the law. And above all, the judges consider that the intention to conceal can be inferred from these facts alone.

But what exactly does that change for you, a landlord in Valbonne or an employer in Grasse? Let's delve into the details of this case to understand how to avoid an adjustment as painful as it is unexpected.

The facts: a story like any other

Mrs X. is employed as a childminder by company Y. (a private individual employer, in fact). In reality, the situation is similar to that of many private employers: a nanny looks after the children at home, but the contract is vague. In our decision, the employer did not make the prior declaration of hiring (DPAE) to the URSSAF. He also paid the employee travel allowances (for her journeys between her home and the workplace). However, these allowances were in reality a disguised supplement to salary: they were flat-rate and without supporting documentation.

The URSSAF therefore carried out an inspection and reclassified these allowances as salary, then notified the employer of an adjustment for undisclosed work (concealment of salaried employment). The employer contested this before the employment tribunal, then on appeal. The Paris Court of Appeal upheld the adjustment, holding that the absence of a DPAE and the payment of fictitious expenses constituted the intentional element of undisclosed work.

The employer appealed to the Court of Cassation, arguing that the absence of a DPAE was not intentional and that the travel expenses were genuine. But the Court of Cassation dismissed the appeal. It held that the Court of Appeal had exercised its sovereign discretion in assessing the employer's intention on the basis of these two elements. In short, there is no need to prove an explicit intention to defraud: the facts speak for themselves.

The reasoning of the court — broken down

The core of the dispute concerns Article L. 8221-5 of the Labour Code (in the version then applicable), which defines undisclosed work. More specifically, paragraph 3 of this article covers concealment of salaried employment by omission of a prior declaration of hiring or declaration of wages. But for the offence to be established, an intentional element is required: the employer must have acted knowingly.

The difficulty is that the law does not precisely define what intention is. The judges must therefore assess it on a case-by-case basis. In this case, the Court of Appeal noted two facts: first, the absence of a DPAE (whereas the employer knew he had to make it); second, the payment of travel allowances without supporting documentation, which disguised part of the remuneration. For the court, this was sufficient to demonstrate that the employer had intended to evade his declaration obligations.

The employer contested this: according to him, the absence of a DPAE was mere negligence, and the expenses were genuine. But the Court of Cassation upheld the reasoning of the lower court judges. It recalls that the assessment of intention is a matter for the sovereign discretion of the lower court judges. In other words, it is not for the Court of Cassation to re-examine the facts: it merely checks that the law has been correctly applied.

What few people know is that the URSSAF, upon receipt of a single hiring declaration (DUE), is obliged to acknowledge receipt. But in this case, the employer had not even sent the declaration. The Court of Appeal therefore logically concluded that there had been concealment.

However, note: this decision does not mean that any absence of a DPAE is automatically intentional. But it shows that judges are very attentive to indicators of fraud, such as the payment of undeclared sums under the guise of expenses.

What this changes for you — concretely

For a landlord who hires a caretaker or concierge (for example in a co-ownership in Mandelieu), this decision is a warning. You must absolutely make the DPAE before the start of employment. If you pay travel allowances, they must be strictly justified (mileage, actual errands). Otherwise, the URSSAF will reclassify them as salary and you may be prosecuted for undisclosed work.

For a tenant who employs a cleaner in Valbonne, the same principle applies. Many individuals think that paying flat-rate "transport costs" is common practice. But if you have no supporting documents, these sums will be considered undeclared salary. The risk? An adjustment of several thousand euros, or even criminal proceedings.

For a professional employer (developer, estate agent, etc.), the consequences are even more serious. In the event of undisclosed work, you may be liable to a fine of €45,000 and 3 years' imprisonment (Article L. 8224-1 of the Labour Code). Not to mention the repayment of contributions and damages to the employee.

undefined, I have encountered cases where employers in the Grasse area had to pay more than €20,000 in back contributions for having omitted the DPAE. And that without even any proven fraud: just negligence. So imagine if you also pay dubious allowances...

Four tips to avoid this type of dispute

• Always make the prior declaration of hiring (DPAE) before the first day of work. This is a simple legal obligation, free of charge, and protects you. You can do it online on the URSSAF website. Keep the acknowledgement of receipt.
• Never pay travel allowances without supporting documentation. If you reimburse expenses, require supporting documentation (toll ticket, fuel invoice). Flat-rate allowances without justification are systematically reclassified as salary.
• Declare all benefits in kind and additional remuneration. Company housing, meal vouchers, flat-rate mileage allowances: everything must appear on the payslip and be declared to the URSSAF.
• If in doubt, consult a lawyer lawyer. An initial 30-minute consultation (at €45) can save you years of proceedings. Better safe than sorry.

Further reading: related case law and developments

This decision is part of a consistent line of case law. As early as 2012 (Cass. soc., 14 November 2012, No. 11-21.885), the Court of Cassation held that the absence of a DPAE was a sufficient element to establish the intention to conceal, unless the employer proved otherwise. The 2015 decision confirms and tightens this position.

Since then, the law has evolved: Article L. 8221-5 has been amended to clarify the criteria. But the trend is clear: judges are increasingly strict. They consider that the employer, as a professional (or even as an informed individual), must know his obligations. Ignorance is no longer an excuse.

For the future, it is likely that the courts will continue to impose heavy penalties for declaration omissions, especially if they are accompanied by dubious practices such as fictitious expenses. Employers must therefore be beyond reproach in their declarations.

What you absolutely must remember

FAQ:

• Q: Is the absence of a prior declaration of hiring always intentional? A: No, but you will have to prove that you simply forgot or were unaware of the obligation. Judges are often sceptical.
• Q: Can I pay travel allowances without supporting documentation? A: No, unless they are of a very small amount and occasional. Better to declare them as salary.
• Q: What time limits apply to challenge an URSSAF adjustment? A: You have 2 months from notification to refer the matter to the amicable claims commission, then 2 months to refer it to the judicial court.
• Q: What is the cost of a lawyer's consultation? A: Maître Zakine offers an initial 30-minute consultation at €45. A modest investment compared to the risks.
• Q: What should I do if the URSSAF demands sums from me? A: Do not pay without checking. Consult a lawyer to analyse the merits of the adjustment and prepare an appeal.

Are you in a similar situation? An initial 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →